Shares of Oil Producer ConocoPhillips Hit Record High on Q4 Earnings Beat

ConocoPhillips shares hit a new record high on Thursday after the Houston-based oil and gas producer reported better-than-expected earnings and revenue in the fourth quarter, thanks to higher energy prices and a waning pandemic.

The oil and gas company reported quarterly adjusted earnings of $2.27​​ per share, beating the Wall Street consensus estimates of $2.18 per share. The company said its revenue surged over 160% to $15.96 billion from a year earlier. That too beat the market expectations of $13.79 billion.

This was largely driven by higher energy prices. Supply shortages and political tensions in Eastern Europe and the Middle East pushed oil prices up on Monday, ending January at their highest level in a year.

On Friday, the benchmark, Brent oil, reached their highest levels in over a year, reaching $91.70 and $88.84, respectively, marking their sixth straight weekly gain. This was their best performance since February 2021, up 17%.

ConocoPhillips stock hit an all-time high of $92.83 on Thursday. The stock rose over 27% so far this year after surging more than 80% in 2021.

Analyst Comments

“ConocoPhillips (COP) checks all the boxes for sustained outperformance: excellent management, disciplined investment, and consistent return of cash coupled with high quality, low-cost portfolio that can deliver an attractive combination of FCF and growth. CXO & Shell Permian transaction bolsters COP’s already diversified, low-cost asset base,” noted Devin McDermott, Equity Analyst And Commodities Strategist at Morgan Stanley.

“Attractive value proposition even in the current commodity price environment with leverage to the rally in oil and with resiliency to a decline in prices. Strong balance sheet. While management received some investor pushback in 2019 for building an ~$8B strategic cash balance, that disciplined strategy paid off in 2020 – creating financial and strategic flexibility.”

ConocoPhillips Stock Price Forecast

Fifteen analysts who offered stock ratings for ConocoPhillips in the last three months forecast the average price in 12 months of $97.27 with a high forecast of $117.00 and a low forecast of $77.00.

The average price target represents a 5.03% change from the last price of $92.61. Of those 15 analysts, 12 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $96 with a high of $136 under a bull scenario and $47 under the worst-case scenario. The investment bank gave an “Overweight” rating on the oil producer’s stock.

Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

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