ConocoPhillips' Q1 Earnings on Deck: Remain Invested in the Stock?

Core Viewpoint - ConocoPhillips (COP) is expected to report first-quarter 2025 results on May 8, with earnings estimated at $1.99 per share, reflecting a 2% decline year-over-year, while revenues are projected to increase by 13.1% to $16.4 billion [1][6]. Earnings Performance - COP has outperformed earnings estimates in three of the last four quarters, with an average surprise of 2.1% [3]. - The company has a positive Earnings ESP of 0.83% and a Zacks Rank of 3 (Hold), indicating a potential earnings beat [4]. Production and Pricing Factors - Average spot prices for WTI crude were $75.74, $71.53, and $68.24 per barrel in January, February, and March respectively, which likely supported COP's exploration and production activities [6]. - Total daily oil equivalent production volumes are forecasted to increase by 23% year-over-year, with a significant 33.2% rise expected in the Lower 48 region [7]. Stock Performance and Valuation - COP's stock has decreased by 27% over the past year, slightly better than the industry's 28% decline [8]. - The current trailing 12-month EV/EBITDA ratio for COP is 5.24, indicating it is undervalued compared to the industry average of 10.76 [9]. Strategic Moves - The acquisition of Marathon Oil has expanded COP's Lower 48 portfolio, adding over 2 billion barrels of resources and is expected to yield annual savings exceeding $1 billion within the next 12 months [12][15]. - The company's focus on exploration and production makes it more susceptible to oil price volatility compared to diversified majors like ExxonMobil and Chevron [15]. Industry Comparison - ExxonMobil reported first-quarter 2025 earnings of $1.76 per share, beating estimates but declining from $2.06 year-over-year, with revenues of $83.13 billion missing estimates [17][18]. - Chevron's adjusted earnings per share were $2.18, surpassing estimates but down from $2.93 year-over-year, with revenues of $47.6 billion also missing expectations [19][20].