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ConocoPhillips After Q1 Earnings: Is the Oil Giant Still a Buy?
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Key Takeaways
COP topped Q1 EPS and revenue estimates, though both declined from year-ago levels.
WTI above $95 a barrel amid Middle East tensions supports COP's crude-heavy revenue mix.
COP targets $1B a year in savings and has 26.55% debt-to-cap vs industry 49.98%.
Last Thursday, ConocoPhillips (COP - Free Report) announced first-quarter 2026 earnings that surpassed expectations, thanks to continued drilling and completion efficiency. High-quality drilling inventories in the Lower 48 have brightened the production outlook of the leading exploration and production company.
Before analyzing the factors driving this positive outlook, let’s first review the first-quarter results.
COP’s Q1 Earnings Snapshot
COP reported earnings per share of $1.89, which beat the Zacks Consensus Estimate of $1.73. The bottom line declined from the year-ago level of $2.09.
Image Source: Zacks Investment Research
Total quarterly revenues of $16.05 billion beat the Zacks Consensus Estimate of $14.81 billion. The top line declined from the year-ago figure of $17.10 billion. For more details, read our article: ConocoPhillips Q1 Earnings Beat on Low Costs & Cash Returns.
Chevron Corporation (CVX - Free Report) and BP plc (BP - Free Report) are two other prominent energy companies with strong upstream presence. Both CVX and BP have already posted results.
High Oil Price to Aid COP’s Upstream Business
The price of West Texas Intermediate (WTI) crude is trading at more than $95 per barrel, according to data from oilprice.com, owing to the ongoing tensions in the Middle East. With COP generating a significant proportion of revenues from crude oil, the high price of the commodity is extremely favorable for the leading oil and gas exploration and production company, much like other energy giants such as BP and CVX.
The upstream energy giant also has low-cost drilling opportunities across Permian, Eagle Ford and Bakken that could be successfully developed over two decades. Thus, the outlook for ConocoPhillips’ upstream operations looks highly profitable.
COP’s Low Debt & Cost Reduction Initiatives
The company has a low exposure to debt capital and hence can rely on its balance sheet to sail through all the business cycles efficiently. Compared to composite stocks in the industry, COP has lower debt exposure, reflected in debt to capitalization of 26.55% compared with the industry’s 49.98%.
ConocoPhillips also has a strong initiative to reduce costs while leaving production unaffected. On its first-quarter 2026 earnings call, the upstream major stated that by year-end, its cost-cutting should be strong enough, and it will be able to save about $1 billion a year if maintained.
What Should Investors Do Now?
The positive developments are getting reflected in the price chart. In the past year, COP has jumped 40.6%, outpacing the industry’s 33.9% growth. BP and CVX, two other energy majors, have gained 65.3% and 41.8%, respectively.
Image Source: Zacks Investment Research
Coming to the valuation story, COP is trading at a discount, despite outpacing the industry in the price chart. On a relative basis, the stock is trading at a 6.73x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a discount compared with the broader industry average of 11.97x. BP and CVX are trading at 3.43x and 9.84x, respectively.
Image Source: Zacks Investment Research
Considering the backdrop, it would be wise to bet on ConocoPhillips right away, as it is trading at a discount. Currently, COP sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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ConocoPhillips After Q1 Earnings: Is the Oil Giant Still a Buy?
Key Takeaways
Last Thursday, ConocoPhillips (COP - Free Report) announced first-quarter 2026 earnings that surpassed expectations, thanks to continued drilling and completion efficiency. High-quality drilling inventories in the Lower 48 have brightened the production outlook of the leading exploration and production company.
Before analyzing the factors driving this positive outlook, let’s first review the first-quarter results.
COP’s Q1 Earnings Snapshot
COP reported earnings per share of $1.89, which beat the Zacks Consensus Estimate of $1.73. The bottom line declined from the year-ago level of $2.09.
Total quarterly revenues of $16.05 billion beat the Zacks Consensus Estimate of $14.81 billion. The top line declined from the year-ago figure of $17.10 billion. For more details, read our article: ConocoPhillips Q1 Earnings Beat on Low Costs & Cash Returns.
Chevron Corporation (CVX - Free Report) and BP plc (BP - Free Report) are two other prominent energy companies with strong upstream presence. Both CVX and BP have already posted results.
High Oil Price to Aid COP’s Upstream Business
The price of West Texas Intermediate (WTI) crude is trading at more than $95 per barrel, according to data from oilprice.com, owing to the ongoing tensions in the Middle East. With COP generating a significant proportion of revenues from crude oil, the high price of the commodity is extremely favorable for the leading oil and gas exploration and production company, much like other energy giants such as BP and CVX.
The upstream energy giant also has low-cost drilling opportunities across Permian, Eagle Ford and Bakken that could be successfully developed over two decades. Thus, the outlook for ConocoPhillips’ upstream operations looks highly profitable.
COP’s Low Debt & Cost Reduction Initiatives
The company has a low exposure to debt capital and hence can rely on its balance sheet to sail through all the business cycles efficiently. Compared to composite stocks in the industry, COP has lower debt exposure, reflected in debt to capitalization of 26.55% compared with the industry’s 49.98%.
ConocoPhillips also has a strong initiative to reduce costs while leaving production unaffected. On its first-quarter 2026 earnings call, the upstream major stated that by year-end, its cost-cutting should be strong enough, and it will be able to save about $1 billion a year if maintained.
What Should Investors Do Now?
The positive developments are getting reflected in the price chart. In the past year, COP has jumped 40.6%, outpacing the industry’s 33.9% growth. BP and CVX, two other energy majors, have gained 65.3% and 41.8%, respectively.
Coming to the valuation story, COP is trading at a discount, despite outpacing the industry in the price chart. On a relative basis, the stock is trading at a 6.73x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a discount compared with the broader industry average of 11.97x. BP and CVX are trading at 3.43x and 9.84x, respectively.
Considering the backdrop, it would be wise to bet on ConocoPhillips right away, as it is trading at a discount. Currently, COP sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.