ConocoPhillips shares have declined 2.5% to below $110 even as West Texas Intermediate crude oil rose 10% to over $74 a barrel since late February, a divergence that one analyst argues makes little sense given heightened geopolitical risk and supply constraints. The article notes that the recent ceasefire in the Persian Gulf and reopening of the Strait of Hormuz follow months of conflict that depleted global oil reserves and damaged production facilities, factors likely to boost demand and push oil prices higher. The analyst expects ConocoPhillips earnings to outperform Wall Street forecasts, which currently project a 10% growth rate and a near-term decline, and points to the stock's 18.3 times trailing earnings and 3.1% dividend yield as potentially undervalued if oil prices rise as anticipated.
ConocoPhillipsAnalyst sees upside due to geopolitical risk and supply constraints boosting oil prices, making stock undervalued.
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