COP
CONOCOPHILLIPSNYSEValuation snapshot
Above base casePrice is between the base and bull cases.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives COP's base case?
base-case thesisSales have recently swung with energy prices, while underlying production has been softer after asset sales and normal field decline. The central case assumes Qatar, Willow and smaller developments gradually lift the company's productive capacity. Cost savings help preserve profitability, but growth remains moderate because COP must continually replace depleted reserves.
What shapes the assumptions
Management expects major projects to add seven billion dollars of annual cash flow by 2029
Incremental project cash flow
Raises revenue growth
First-half production and operating expense fell by $371 million
Production and operating expense
Raises operating margin
2026 capital guidance is about twelve billion dollars
Annual capital spending
Informs reinvestment
Recent reported tax rates clustered in the mid-thirties
Effective income-tax rate
Informs tax rate
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 9.8% a year. Over the last 5 years it grew 23.4% a year — so the price assumes less than it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 34.1% operating margin, against the 26.0% assumed here.
- How confident is this estimate?
- Robustness 41.0/10 (Fragile) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Realized price per BOE, second quarter
The average selling price across COP's production is the most direct driver of revenue and profit per barrel equivalent.
$62
reported2. Total production, second quarter
Daily oil-equivalent output measures the physical volume available for sale before commodity prices are applied.
2,248 MBOED
reported3. Annual capital program
Annual capital expenditures measure the cash required to replace declining fields and build projects such as Willow and LNG facilities.
$13B
reported4. Production cost per BOE, annual
Production and operating expense per barrel equivalent tracks whether scale and efficiency are reducing the cost of maintaining output.
11.92 USD/BOE
derived5. Pretax operating return on sales, second quarter
This derived quarterly rate shows how realized prices and operating costs combine before financing and income taxes.
32.7%
derivedBase inputs from financials
source period →Base revenue (TTM)
$56.3B
Diluted shares
1,214,255,000
Net cash
—
Bear
low confidence$35.43
IV / share
-73.9% vs $135.72
- Explicit cash flows
- $11.05
- Terminal value
- $24.38
- Net cash
- $0.00
- Intrinsic value / share
- $35.43
68.8% of the value rests on the terminal value — elevated dependency.
Revenue growth-12.0% → -6.0% → 0.0% → 1.0% → 1.0%low
How derived: Starting from the latest quarter's price-led revenue increase but 0.06 reported production decline, this path assumes commodity prices retreat, dispositions and field decline reduce volumes initially, and later projects merely stabilize revenue.
Why this confidence: Reported production decline ↑, Commodity-price uncertainty over five years ↓
Measured by
- Realized price per BOE, second quarter$62reported
- Total production, second quarter2,248 MBOEDreported
- Annual capital program$13Breported
Evidence for
- Second-quarter 2026 production declined 0.06 year over year, with normal field decline the principal cause.[COP 2026 Q2 10-Q]· primary
Evidence against
- Management reaffirmed its plan for a $7 billion annual free-cash-flow improvement by 2029 and reported additional LNG and Middle East growth opportunities.[COP Q2 2026 results]· primary
Operating margin18.0%low
How derived: Starting from a derived second-quarter 2026 margin of approximately 0.327, this case assumes lower realized prices reverse much of the recent price-driven improvement while fixed production and depletion costs remain.
Why this confidence: Direct filing data on price sensitivity ↑, Future commodity-price mix ↓
Measured by
- Realized price per BOE, second quarter$62reported
- Production cost per BOE, annual11.92 USD/BOEderived
- Pretax operating return on sales, second quarter32.7%derived
Evidence for
- COP states that its prices, margins and operating cash flows are historically volatile and largely driven by market conditions beyond its control.[COP 2025 10-K]· primary
Evidence against
- Second-quarter 2026 production and operating expenses fell by $141 million year over year because of increased efficiencies.[COP 2026 Q2 10-Q]· primary
Tax rate39.0%medium
How derived: Starting from effective rates of approximately 0.369 in 2025 and 0.354 in second-quarter 2026, this case allows for a less favorable mix of income in higher-tax foreign jurisdictions.
Why this confidence: Audited geographic tax disclosures ↑, Uncertain future income geography ↓
Measured by
- Pretax operating return on sales, second quarter32.7%derived
Evidence for
- Foreign current taxes were $3.287 billion of COP's $4.668 billion 2025 income-tax provision.[COP 2025 10-K]· primary
Evidence against
- The second-quarter 2026 effective rate derived from the filing was approximately 0.354, below this assumption.[COP 2026 Q2 10-Q]· primary
Reinvestment rate36.0%medium
How derived: Starting from $12.553 billion of 2025 capital spending and the higher Willow cost estimate, this case retains a large portion of after-tax operating profit to offset decline and complete major projects under weaker cash generation.
Why this confidence: Published capital guidance ↑, Simplified reinvestment-to-profit model ↓
Measured by
- Total production, second quarter2,248 MBOEDreported
- Annual capital program$13Breported
- Production cost per BOE, annual11.92 USD/BOEderived
Evidence for
- The Willow estimate increased to $8.5 billion-$9.0 billion, with approximately $1.7 billion expected annually during 2026-2028.[Willow project update]· primary
Evidence against
- Management set 2026 capital guidance near $12 billion, below 2025 spending, and reported drilling and completion efficiency gains above 0.15.[COP 2025 10-K]· primary
Terminal growth0.0%low
How derived: Starting from mature upstream assets exposed to depletion and long-run petroleum uncertainty, this case assumes new projects and inflation only offset shrinking legacy production after the explicit forecast.
Why this confidence: Official long-range energy scenarios ↑, Very long forecast horizon ↓
No tracked driver measures this assumption yet.
Evidence for
- EIA projects total U.S. energy consumption to remain broadly flat or decline slightly through 2050 in most cases.[EIA Annual Energy Outlook 2026]· primary
Evidence against
- EIA projects significant U.S. natural-gas production growth through 2050 in most cases, driven by domestic demand and exports.[EIA AEO2026 natural-gas outlook]· primary
Base
low confidence$103.58
IV / share
-23.7% vs $135.72
- Explicit cash flows
- $25.88
- Terminal value
- $77.69
- Net cash
- $0.00
- Intrinsic value / share
- $103.58
75.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth2.0% → 3.5% → 5.0% → 4.0% → 3.0%medium
How derived: Starting from modest 2025 revenue growth and mixed 2026 quarterly growth, this path assumes near-term price normalization followed by contributions from Qatar LNG, Willow and other sanctioned projects.
Why this confidence: Management project schedule and guidance ↑, Revenue remains commodity-price dependent ↓
Measured by
- Realized price per BOE, second quarter$62reported
- Total production, second quarter2,248 MBOEDreported
- Annual capital program$13Breported
Price implies: 9.8% vs our 3.5% — one of several sets that fit this price
Evidence for
- Management expects four major projects and cost initiatives to produce $7 billion of incremental annual free cash flow by 2029.[COP full-year 2025 results]· primary
Evidence against
- Second-quarter 2026 production declined 0.06 year over year and adjusted production declined 0.04.[COP 2026 Q2 10-Q]· primary
Operating margin26.0%medium
How derived: Starting from a derived 2025 margin near 0.261 on the supplied revenue basis and a stronger latest quarter, this case assumes efficiencies preserve the 2025 level through a normalized price cycle.
Why this confidence: Comparable audited cost data ↑, Uncertain commodity-price cycle ↓
Measured by
- Realized price per BOE, second quarter$62reported
- Production cost per BOE, annual11.92 USD/BOEderived
- Pretax operating return on sales, second quarter32.7%derived
Price implies: 34.1% vs our 26.0% — one of several sets that fit this price
Evidence for
- Production and operating expenses declined $371 million in the first half of 2026 because of increased efficiencies.[COP 2026 Q2 10-Q]· primary
Evidence against
- COP reported that lower 2025 crude prices reduced revenue by $4.615 billion, demonstrating substantial sensitivity to prices.[COP 2025 10-K]· primary
Tax rate36.0%high
How derived: Starting from effective rates of approximately 0.369 in 2025 and 0.354 in second-quarter 2026, this assumption uses the midpoint as a sustainable rate for COP's U.S. and higher-tax international mix.
Why this confidence: Two recent reported effective rates ↑, Geographic income-mix variability ↓
Measured by
- Pretax operating return on sales, second quarter32.7%derived
Evidence for
- The reported 2025 tax provision of $4.668 billion on $12.656 billion of pretax income implies a rate of approximately 0.369.[COP 2025 10-K]· primary
Evidence against
- Changes in oil prices and production-sharing arrangements can shift taxable income among jurisdictions and make the effective rate volatile.[COP 2025 10-K]· primary
Reinvestment rate24.0%medium
How derived: Starting from $12.553 billion of 2025 capital spending and approximately $12 billion guided for 2026, this case assumes efficiency gains and project completions gradually reduce the share of after-tax operating profit retained.
Why this confidence: Near-term capital guidance ↑, Post-2029 maintenance needs ↓
Measured by
- Total production, second quarter2,248 MBOEDreported
- Annual capital program$13Breported
- Production cost per BOE, annual11.92 USD/BOEderived
Evidence for
- COP invested $12.553 billion in 2025 and guided to approximately $12 billion for 2026 while major projects remained under construction.[COP 2025 10-K]· primary
Evidence against
- Management expects $1 billion of annual capital and cost reductions in 2026 and reported Lower 48 drilling and completion efficiency gains above 0.15 in 2025.[COP full-year 2025 results]· primary
Terminal growth1.5%low
How derived: Starting from EIA's outlook for growing natural-gas demand but broadly flat total energy use, this rate assumes COP grows below nominal economic activity after its current projects mature.
Why this confidence: Official scenario range ↑, Long-run policy and technology uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- EIA projects U.S. natural-gas consumption and LNG exports to grow through 2050 in most modeled cases.[EIA Annual Energy Outlook 2026]· primary
Evidence against
- EIA projects overall U.S. energy consumption to remain flat or decline slightly in most cases through 2050.[EIA Annual Energy Outlook 2026]· primary
Bull
low confidence$193.23
IV / share
+42.4% vs $135.72
- Explicit cash flows
- $41.01
- Terminal value
- $152.22
- Net cash
- $0.00
- Intrinsic value / share
- $193.23
78.8% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth8.0% → 7.0% → 7.0% → 5.0% → 4.0%low
How derived: Starting from the latest quarter's strong price-led revenue growth, this path assumes supportive commodity prices, successful Middle East additions and timely Qatar and Willow ramp-ups compound volume and mix gains.
Why this confidence: Named and scheduled growth projects ↑, Requires favorable prices and flawless execution ↓
Measured by
- Realized price per BOE, second quarter$62reported
- Total production, second quarter2,248 MBOEDreported
- Annual capital program$13Breported
Evidence for
- COP reported record Permian production, increased LNG offtake to 12 MTPA and reaffirmed its $7 billion 2029 free-cash-flow objective.[COP Q2 2026 results]· primary
Evidence against
- Total second-quarter production declined 0.06 year over year despite record Permian performance.[COP Q2 2026 results]· primary
Operating margin33.0%low
How derived: Starting from a derived second-quarter 2026 margin of approximately 0.327, this case assumes strong realized prices and the announced cost program make that unusually profitable quarter sustainable.
Why this confidence: Latest reported income statement ↑, Peak-like commodity conditions ↓
Measured by
- Realized price per BOE, second quarter$62reported
- Production cost per BOE, annual11.92 USD/BOEderived
- Pretax operating return on sales, second quarter32.7%derived
Evidence for
- Second-quarter 2026 realized price increased 0.36 year over year while production and operating expenses declined.[COP Q2 2026 results]· primary
Evidence against
- Full-year 2025 crude prices were lower and reduced revenue by $4.615 billion, showing that current profitability can reverse quickly.[COP 2025 10-K]· primary
Tax rate33.0%low
How derived: Starting from recent effective rates above 0.35, this case assumes a more favorable Lower 48 income mix, tax attributes and project fiscal terms reduce the long-run burden.
Why this confidence: Reported segment mix ↑, Assumed future tax benefits ↓
Measured by
- Pretax operating return on sales, second quarter32.7%derived
Evidence for
- Lower 48 supplied 0.69 of consolidated liquids production and 0.74 of consolidated natural-gas production in second-quarter 2026.[COP 2026 Q2 10-Q]· primary
Evidence against
- The 2025 effective rate was approximately 0.369 and most of the provision was foreign tax.[COP 2025 10-K]· primary
Reinvestment rate18.0%low
How derived: Starting from falling guided capital, better drilling efficiency and projects approaching startup, this case assumes COP converts more after-tax operating profit to distributable cash after the construction peak.
Why this confidence: Documented efficiency gains ↑, Aggressive post-project cash conversion ↓
Measured by
- Total production, second quarter2,248 MBOEDreported
- Annual capital program$13Breported
- Production cost per BOE, annual11.92 USD/BOEderived
Evidence for
- COP reported drilling and completion efficiency improvements above 0.15 and guided 2026 capital below the 2025 level.[COP 2025 10-K]· primary
Evidence against
- Willow still requires approximately $1.7 billion annually during 2026-2028, and upstream production must continually offset natural decline.[Willow project update]· primary
Terminal growth2.5%low
How derived: Starting from EIA's long-run natural-gas growth outlook and COP's expanding LNG portfolio, this case assumes inflation-like growth as gas and LNG offset mature oil assets.
Why this confidence: Measured LNG portfolio expansion ↑, Multi-decade demand uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- EIA projects U.S. dry-natural-gas production to rise from 107 Bcf/d in 2025 to 133-151 Bcf/d in 2050 in most cases.[EIA AEO2026 natural-gas outlook]· primary
Evidence against
- EIA's low-supply case projects U.S. dry-natural-gas production of only 82 Bcf/d in 2050, illustrating wide geological and price uncertainty.[EIA Annual Energy Outlook 2026]· primary
Valuation robustness
reliability of the estimate, not a stock rating41 / 100 · Fragile
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 75% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The bear-to-bull range spans 152% of the base value — the outcome is highly uncertain.→ scenarios
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | -7.1% | — | — | 1.16B | -3.0% |
| Q1 2025 | 17.6% | — | — | 1.27B | 8.0% |
| Q2 2025 | -0.3% | — | — | 1.26B | 7.6% |
| Q3 2025 | 14.0% | — | — | 1.25B | 7.2% |
| Q1 2026 | -6.8% | — | — | 1.22B | -3.9% |
| Q2 2026 | 43.3% | — | — | 1.21B | -3.6% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The January 2026 bottom-up levered beta for 142 U.S. oil and gas exploration and production companies was 0.72, which is used instead of COP's unstable recent single-stock regression beta.
The forward-looking implied U.S. equity risk premium calculated for 2026-09-01 using trailing adjusted payouts was 0.0414.
COP's company-hosted NYSE quote showed $133.82 at 2026-09-04 4:10 p.m. Eastern, the latest trading day before the valuation date.
Generated 9/6/2026, 11:32:33 AM · pipeline v1.2.0