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ConocoPhillips (COP) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

ConocoPhillips (COP) closed the most recent trading day at $63.52, moving +1.11% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.1%.

Prior to today's trading, shares of the energy company had gained 10.79% over the past month. This has outpaced the Oils-Energy sector's gain of 0.98% and the S&P 500's gain of 1.82% in that time.

Investors will be hoping for strength from COP as it approaches its next earnings release, which is expected to be February 4, 2020. The company is expected to report EPS of $0.77, down 31.86% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.87 billion, down 33.68% from the year-ago period.

COP's full-year Zacks Consensus Estimates are calling for earnings of $3.63 per share and revenue of $36.41 billion. These results would represent year-over-year changes of -19.87% and -5.98%, respectively.

Any recent changes to analyst estimates for COP should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.14% higher within the past month. COP is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, COP is currently trading at a Forward P/E ratio of 17.33. For comparison, its industry has an average Forward P/E of 17.33, which means COP is trading at a no noticeable deviation to the group.

It is also worth noting that COP currently has a PEG ratio of 1.82. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Integrated - United States stocks are, on average, holding a PEG ratio of 2.15 based on yesterday's closing prices.

The Oil and Gas - Integrated - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 77, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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