RBC Capital analyst Scott Hanold sees promising growth drivers for energy giant ConocoPhillips (COP) ahead of its fiscal first quarter results, due for release on May 8. The five-star analyst remains highly bullish about COP’s long-term stock trajectory. Hanold has awarded COP stock a “Buy” rating and a $120 price target, which implies a nearly 37% upside potential from current levels.
Meanwhile, the Street expects ConocoPhillips to post adjusted earnings per share (EPS) of $2.05, slightly higher than the $2.03 reported in Q1FY24. According to TipRanks’ Analyst Forecasts Tool, the consensus revenue estimate stands at $16.33 billion, reflecting a nearly 19% year-over-year increase. ConocoPhillips is one of the world’s largest exploration and production companies, based on both production and reserves.
What’s Behind Hanold’s Optimism on COP Stock?
Hanold returned encouraged from ConocoPhillips’ recent investor round table, where management showed strong conviction in the company’s free cash flow (FCF) generation capabilities. COP is also confident about its operations in Alaska and its solid LNG (liquified natural gas) portfolio as key growth drivers.
Accordingly, Hanold has projected both EPS and CFPS (cash flow per share) figures in his COP model to be “slightly above” COP’s sensitivities, implying an EPS range of $2.00 to $2.05 and FCF range of $5.5 to $5.6 billion.
- $10 billion in Shareholder Return – Hanold expects COP to maintain its shareholder return target of $10 billion for 2025, backed by its robust balance sheet, strong cash balance, and FCF generation capabilities.
- Oil Prices to Remain in Upper $50/bbl Range – The analyst projects that if oil prices remain in the upper $50/bbl range through the remainder of this year, COP could deliver at least $8 billion in shareholder returns next year. Notably, RBC Capital Markets’ oil strategist’s 2026 deck forecasts average oil prices to be around $57/bbl (WTI) in 2026.
- $2 Billion Asset Divestiture Plan – Hanold expects further clarity on COP’s $2 billion asset divestiture plan, which aims to reinforce its financial position. COP is also expected to unlock $1 billion cash from its planned sale of non-core Permian assets and the Ursa/Europa fields. Plus, Hanold cited a Reuters report, stating that COP is evaluating selling its Anadarko position for roughly $1 billion, which will add to its corpus.
Overall, Hanold believes that investors would keenly await more details on COP’s shareholder return target should oil prices remain below $60/bbl (WTI) for an extended period. Plus, they will be watching for details on potential M&A activities and asset divestitures, benefits from COP’s purchase of Marathon Oil (MRO), NOLs (Net Operating Losses), and operational activity in the onshore Lower 48 (L48). The L48 segment is COP’s scalable inventory with low cost of supply and low greenhouse gas emissions intensity, positioning COP to generate significant returns over many years of future development.
Who Is Scott Hanold?
Scott Hanold ranks an incredible #9 out of the 9,504 analysts tracked by TipRanks. Moreover, he boasts a success rate of 67% and an average return of 28.80% per rating. Hanold is a Managing Director at RBC Capital and an industry expert in the U.S. Exploration & Production sector.
Is COP a Buy, Hold, or Sell?
Ahead of ConocoPhillips Q1FY25 results, analysts remain highly optimistic about its long-term potential. On TipRanks, COP stock has a Strong Buy consensus rating based on 17 Buys and two Hold ratings. Also, the average ConocoPhillips price target of $120.79 implies 37.8% upside potential from current levels. Year-to-date, COP stock has lost 10.9%.
RBC Disclosures:
A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from ConocoPhillips in the past 12 months.
A member company of RBC Capital Markets or one of its affiliates expects to receive or intends to seek compensation for investment banking services from ConocoPhillips in the next three months.
A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for ConocoPhillips in the past 12 months.
A member company of RBC Capital Markets or one of its affiliates received compensation for products or services other than investment banking services from ConocoPhillips during the past 12 months. During this time, a member company of RBC Capital Markets or one of its affiliates provided non-securities services to ConocoPhillips.
RBC Capital Markets has provided ConocoPhillips with non-securities services in the past 12 months.