ZACKSยท2025-07-18 15:35Core Viewpoint - The current rise in West Texas Intermediate (WTI) oil prices, trading above $68 per barrel and nearing $70, is beneficial for ConocoPhillips (COP) and its exploration and production activities due to renewed tensions in the Middle East [1][7]. Group 1: Company Overview - ConocoPhillips has low-cost resources both internationally and domestically, with a strong focus on the United States, particularly in the Lower 48 states, which include major shale plays like the Permian Basin, Eagle Ford, and Bakken [2]. - The company's business model demonstrates resilience, supported by the favorable pricing environment of oil, which is significantly above the break-even price for its operations [3][7]. Group 2: Market Position and Performance - The ongoing pricing environment is highly favorable for ConocoPhillips, aiding its overall business and positively impacting its bottom line [3]. - Despite a 16.3% decline in COP shares over the past year, this is slightly better than the 19.1% decline of the broader industry composite [6]. - The Zacks Consensus Estimate for COP's 2025 earnings has been revised upward, reflecting confidence in the company's future performance as oil prices remain well above its breakeven levels [11]. Group 3: Valuation Metrics - ConocoPhillips trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.17X, which is below the industry average of 11.07X, indicating potential undervaluation [9].