ConocoPhillips Q3 Earnings: Can NYSE:COP Hit Its -$0.31 EPS Target?

in EARNINGS/INVESTING IDEAS by

ConocoPhillips (NYSE:COP) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of -$0.31/share on revenue of $4.983 billion. The consensus earnings per share (EPS) of -$0.31/share is based on a poll of 21 analysts and represents a decline in eps of −137.9% over the same quarter last year, when the company reported earnings of $0.82/share.

The revenue forecast of $4.983 billion based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −50.6%. Last year the company reported $10.093 billion in revenue for the quarter.

Expected to report EPS of -$0.31/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $4,982.65 $10,093.00 −50.6%
EPS -$0.31 $0.82 −137.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from ConocoPhillips for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.58 -$0.92 -59.3% Missed
Q1, 2020 $0.17 $0.45 168.0% Beat
Q4, 2019 $0.81 $0.76 −6.1% Missed
Q3, 2019 $0.74 $0.82 10.4% Beat
Q2, 2019 $1.03 $1.01 −2.2% Missed
Q1, 2019 $0.90 $1 10.8% Beat
Q4, 2018 $1.02 $1.13 11.0% Beat
Q3, 2018 $1.19 $1.36 14.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −6.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $39.94 $37.39 −6.4% Decline
April 30, 2020 $42.21 $39.14 −7.3% Decline
February 4, 2020 $59.18 $58.78 −0.7% Decline
October 29, 2019 $55.68 $55.04 −1.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.51, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.51 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

ConocoPhillips is currently trading at $30.32/share, down −6.8% for the day. The company is trading at approximately 45.2% of its 52-week high of $67.13/share. The company’s stock price is down −18.9% since the last earnings report and down −6.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 38.52 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:COP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 14.16 and a forward P/E multiple of −38.61.

ConocoPhillips’s current share price also implies a price-to-book (P/B) multiple of 1.03. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $30.32
P/E Ratio 14.2x
P/E Ratio (Fwd) −38.6x
PEG Ratio −0.2
Total Debt / Total Capital 30.1%
Levered Free Cash Flow $1.786 billion
EV / EBITDA 3.7x

Finbox

ConocoPhillips is a large-cap stock with a market capitalization of $32.52 billion and a total enterprise value of $39.655 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. The company primarily engages in the conventional and tight oil reservoirs, shale gas, heavy oil, LNG, oil sands, and other production operations. Its portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; various LNG developments; oil sands assets in Canada; and an inventory of conventional and unconventional exploration prospects. The company was founded in 1917 and is headquartered in Houston, Texas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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