Why ConocoPhillips Stock Dropped on Tuesday

ConocoPhillips (NYSE: COP) stock slipped 2.2% through 11:15 a.m. ET Tuesday on a double dose of "bad" news. First and most obviously, oil prices are down today, and for a company that makes its money selling oil, that's self-evidently bad news.

Second, and less obviously, Roth/MKM just downgraded ConocoPhillips stock.

Oil price drop

Brent crude oil prices fell about 1% today, to just over $67 a barrel, according to data from OilPrice.com. The most obvious catalyst for the move is news that Iran partially closed, but has already reopened, the Strait of Hormuz. Iran and the U.S. are discussing a nuclear deal, and so long as the two sides are talking, they're not shooting.

This is good news for anyone who doesn't want to see another war in the Mideast, and also for anyone who owns a gasoline-powered car -- but Conoco and other oil investors would probably prefer to see oil prices going up.

Roth downgrades Conoco stock

In more Conoco-specific news, Roth/MKM analyst Leo Mariani downgraded Conoco stock to neutral this morning, as StreetInsider.com reports.

At $109 per share and a 17.6 price-to-earnings ratio, Mariani observes that Conoco stock has a "higher valuation vs. peers." The analyst warns that this makes Conoco stock more vulnerable to an oil price decline, and he thinks "global oil prices are close to a near-term top."

Why does he think this?

OPEC+ "added back around 2 MMBopd of oil to global markets between April 1, 2025 and December 31, 2025," says the analyst. Despite "pretty good" demand, "we expect those volumes to keep global oil markets in an oversupplied state for most of 2026."

In the analyst's view, this all adds up to lower oil prices -- and a $112 target price for Conoco stock.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.