ConocoPhillips (COP) Stock Still Looks Undervalued Despite Its Iraq Oilfields Deal

ConocoPhillips stock has delivered a 152.3% total return over the past five years, yet its current valuation checks and recent share price around US$119 still leave investors weighing how much upside is already reflected.

• A 152.3% return over five years suggests ConocoPhillips has rewarded patient shareholders, which raises the bar for fresh upside from here.
• The planned acquisition of a 42% stake in BP's Kirkuk oil fields may support long term cash flow potential, while execution and geopolitical risks in Iraq can affect how much value ultimately reaches shareholders.
• On Simply Wall St's broader valuation checks, ConocoPhillips is assessed as undervalued in 4 of 6 areas, which points to a mixed picture rather than a clear bargain or clear overvaluation.

The issue now is whether ConocoPhillips' current price fairly reflects its risk and return trade off after such a strong multi year run.

Find out why ConocoPhillips' 29.0% return over the last year is lagging behind its peers.

Is ConocoPhillips Still Cheap on Earnings?

P/E is a useful check for ConocoPhillips because earnings remain a key anchor for how investors value large oil and gas producers. ConocoPhillips currently trades on a P/E of about 19.9x, compared with an oil and gas industry average of roughly 14.0x and a peer group average of around 26.1x. That places the stock at a premium to the broader industry, yet still below the nearer peer set.

The fair P/E ratio from Simply Wall St's model is 24.9x, which is higher than where ConocoPhillips trades today. This framework looks at factors such as profitability, size and risk profile, so the gap suggests the current market multiple sits below what that tailored benchmark implies. Despite interest in the recently announced Kirkuk deal in Iraq, the present P/E still prices ConocoPhillips at a discount to this fair value marker.

On this earnings multiple, the stock appears undervalued relative to the fair P/E that the model suggests for ConocoPhillips.

See what the numbers say about this price — find out in our valuation breakdown.

The ConocoPhillips Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for ConocoPhillips pick up where this valuation puzzle leaves off by explaining what path for growth, margins and earnings would need to occur for the stock to be worth materially more or materially less than today’s price. These narratives are available on the company’s Community page. Each one treats fair value as a thesis about ConocoPhillips' business that can be tracked over time rather than a one-off snapshot.

The community view on ConocoPhillips splits into two very different stories about what the current price really implies.

Bull case: 17% undervalued

"The company's expanding LNG portfolio and progress on large-scale liquefaction projects (notably in Qatar, Port Arthur, and Willow) are set to capture significant market share from robust global gas demand, especially as natural gas solidifies its role as a 'transition fuel'…"

Read the full Bull Case to see why ConocoPhillips could be undervalued

Bear case: roughly fairly valued

"The plan to drive a $7b free cash flow inflection by 2029, including around $1b of incremental free cash flow per year from 2026 to 2028 and a further $4b from Willow, concentrates expectations on a narrow set of large projects…"

Read the full Bear Case to see why ConocoPhillips could be overvalued

Do you think there's more to the story for ConocoPhillips? Head over to our Community to see what others are saying!

The Bottom Line

ConocoPhillips screens as undervalued on its current P/E against the tailored fair multiple, although the broader valuation checks point to a more mixed picture. That leaves the stock looking neither like a clear bargain nor clearly stretched at today’s price.

The key question now is whether ConocoPhillips can deliver on its large project pipeline, including the Iraq and LNG plans, without unexpected setbacks. If those projects convert into durable earnings and cash flow with manageable risk, the present discount to the fair P/E could prove attractive. If execution or geopolitical risks bite harder, the current valuation may already be about as generous as the market wants to be.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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