JP Morgan analyst Arun Jayaram raised the price forecast from $123 to $127 for ConocoPhillips COP following fourth-quarter results reported yesterday.

The company reported revenue of $14.74 billion, beating the consensus of $14.30 billion and adjusted EPS of $1.98, beating the consensus of $1.84. 

The analyst writes that the key takeaway from ConocoPhillips’ call was its focus on long-term FCF growth, with 2025 marking peak long-cycle capex at ~$3 billion of the $12.9 billion budget.

ConocoPhillips also announced a $1.4 billion capex reduction vs. PF MRO/COP 2024 spending while maintaining low single-digit volume growth, driven by efficiency gains, program optimization, $500 million in MRO synergies and $200 million in cost deflation, added Jayaram.

The analyst updated the model to reflect COP's 2025 guidance of 2,360 million Boe/d production and $12.9B in capex, with lower volumes due to ~$600 million in asset sales, planned turnarounds and winter weather impacts.

Jayaram now forecasts 2,365 million Boe/d, slightly below consensus, and estimate $10 billion in pre-dividend FCF at recent strip pricing.

Investors can gain exposure to the COP stock via Texas Capital Funds Trust Texas Capital Texas Oil Index ETF OILT and IShares U.S. Oil & Gas Exploration & Production ETF IEO.

Price Action: COP shares are down 0.92% at $99.03 at the last check Friday.

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