Raymond James has increased its price target for ConocoPhillips (COP, Financial), raising it from $109 to $117 while maintaining an Outperform rating on the stock. Despite prevailing macroeconomic uncertainties, the recent recovery in oil prices has not prompted significant changes in management activities, according to the analyst's note. Investors are encouraged to consider these developments as part of their investment strategy.
COP Key Business Developments
Release Date: May 08, 2025
- Production: 2,389,000 barrels of oil equivalent per day, exceeding guidance.
- Lower 48 Production: 1,462,000 barrels per day, with 816,000 in the Permian, 379,000 in the Eagle Ford, and 212,000 in the Bakken.
- Adjusted Earnings: $2.09 per share.
- Cash from Operations (CFO): $5.5 billion, including $200 million from APLNG distributions.
- Capital Expenditures: $3.4 billion.
- Return of Capital: $2.5 billion to shareholders, including $1.5 billion in buybacks and $1 billion in dividends.
- Cash and Investments: $7.5 billion in cash and short-term investments, plus $1 billion in long-term liquid investments.
- Full-Year Production Guidance: Unchanged, with low single-digit growth expected.
- Capital Spending Guidance: Reduced to $12.3 billion to $12.6 billion, down from $12.9 billion.
- Adjusted Operating Costs: Lowered by $200 million to $10.7 billion to $10.9 billion.
- APLNG Distributions: Expected to be $800 million for the year, with $600 million in the third quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ConocoPhillips (COP, Financial) exceeded the high end of its production guidance for the first quarter, producing 2,389,000 barrels of oil equivalent per day.
- The company successfully integrated Marathon Oil ahead of schedule, finding additional opportunities to enhance capital efficiency and reduce costs.
- ConocoPhillips (COP) reduced its capital spending guidance by $0.5 billion and operating costs by $200 million while maintaining its production guidance.
- The company returned $2.5 billion to shareholders in the first quarter, consistent with its long-term track record of distributing 45% of its annual cash flow from operations.
- ConocoPhillips (COP) has a deep, durable, and diverse portfolio with decades of high-quality, low-cost supply inventory, positioning it well for long-term free cash flow growth.
Negative Points
- The macro environment is marked by uncertainty and volatility, with revised lower outlooks for global economic growth and oil demand.
- OPEC Plus is unwinding voluntary cuts quicker than expected, leading to softened oil prices relative to the first quarter.
- The company's full-year effective corporate tax rate is expected to be higher than prior guidance due to geographic income mix.
- Full-year APLNG distributions are expected to be lower than initially anticipated, primarily due to lower pricing.
- ConocoPhillips (COP) anticipates a modest use of cash on a full-year basis due to normal timing of tax payments and unwinding of first-quarter working capital tailwinds.
