ConocoPhillips’ (COP - Free Report) shares have jumped 82.4% in the past year compared with the industry’s 62.5% growth. Notably, the Zacks Rank #3 (Hold) stock has witnessed upward earnings estimate revisions for 2022 and 2023, respectively, in the past 30 days.
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate (WTI) crude is trading higher than the $115-per-barrel mark, marking a massive improvement in the past year. The commodity’s price is likely to rise in the coming days since there has been a disruption in the energy market owing to sanctions on Russia following the prolonged Ukraine war.
Overall, improving oil prices are a boon for ConocoPhillips’ upstream operations. This is because the company is a leading oil producer with a strong presence in Lower 48 major acreage areas that comprise prolific shale plays like the Permian Basin, Bakken and Eagle Ford. The company’s production profile looks bright as it has decades of low-cost premium drilling sites in those resources.
ConocoPhillips also has a sound balance sheet with significantly lower debt exposure compared to the composite stocks belonging to the industry. ConocoPhillips’ debt-to-capitalization of 27.6% is lower than the industry’s 36.4%.
Risks
Although the long-term view seems lucrative, in the short term, ConocoPhillips is exposed to oil price volatility. Moreover, increasing total expenses is hurting the upstream energy company’s bottom line.
Last Word
It can be concluded that ConocoPhillips, with key projects of emission reductions, has plenty of room left for further stock price upside despite some of the lingering risk factors.
Stocks to Consider
A couple of better-ranked players in the energy space are Antero Resources (AR - Free Report) , Comstock Resources (CRK - Free Report) and Southwestern Energy (SWN - Free Report) . While Antero Resources and Comstock Resources sport a Zacks Rank #1 (Strong Buy), Southwestern carries a Zacks Rank #2 (Buy).
Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 60 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.
The substantial exposure to improving commodity price is a huge positive for Antero Resources.
Comstock is a well-known name in the upstream space, with operations across the gas-rich Haynesville shale in North Louisiana and East Texas. The substantial exposure to improving commodity price is a huge positive for Comstock.
In the past 30 days, Comstock has witnessed upward earnings estimate revisions for 2022 and 2023.
Favorable commodity prices are also a huge positive for Southwestern Energy since it is a leading natural gas producer in the United States. In the past 30 days, Southwestern Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
For this year, Southwestern Energy is likely to see earnings growth of 46.7%.
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ConocoPhillips’ (COP - Free Report) shares have jumped 82.4% in the past year compared with the industry’s 62.5% growth. Notably, the Zacks Rank #3 (Hold) stock has witnessed upward earnings estimate revisions for 2022 and 2023, respectively, in the past 30 days.
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate (WTI) crude is trading higher than the $115-per-barrel mark, marking a massive improvement in the past year. The commodity’s price is likely to rise in the coming days since there has been a disruption in the energy market owing to sanctions on Russia following the prolonged Ukraine war.
Overall, improving oil prices are a boon for ConocoPhillips’ upstream operations. This is because the company is a leading oil producer with a strong presence in Lower 48 major acreage areas that comprise prolific shale plays like the Permian Basin, Bakken and Eagle Ford. The company’s production profile looks bright as it has decades of low-cost premium drilling sites in those resources.
ConocoPhillips also has a sound balance sheet with significantly lower debt exposure compared to the composite stocks belonging to the industry. ConocoPhillips’ debt-to-capitalization of 27.6% is lower than the industry’s 36.4%.
Risks
Although the long-term view seems lucrative, in the short term, ConocoPhillips is exposed to oil price volatility. Moreover, increasing total expenses is hurting the upstream energy company’s bottom line.
Last Word
It can be concluded that ConocoPhillips, with key projects of emission reductions, has plenty of room left for further stock price upside despite some of the lingering risk factors.
Stocks to Consider
A couple of better-ranked players in the energy space are Antero Resources (AR - Free Report) , Comstock Resources (CRK - Free Report) and Southwestern Energy (SWN - Free Report) . While Antero Resources and Comstock Resources sport a Zacks Rank #1 (Strong Buy), Southwestern carries a Zacks Rank #2 (Buy).
Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 60 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.
The substantial exposure to improving commodity price is a huge positive for Antero Resources.
Comstock is a well-known name in the upstream space, with operations across the gas-rich Haynesville shale in North Louisiana and East Texas. The substantial exposure to improving commodity price is a huge positive for Comstock.
In the past 30 days, Comstock has witnessed upward earnings estimate revisions for 2022 and 2023.
Favorable commodity prices are also a huge positive for Southwestern Energy since it is a leading natural gas producer in the United States. In the past 30 days, Southwestern Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
For this year, Southwestern Energy is likely to see earnings growth of 46.7%.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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