Conoco stock isn’t cheap yet, but higher oil prices could help.
ConocoPhillips (COP +3.16%) stock jumped 3.3% through 11:05 a.m. ET Tuesday, and it’s not hard to guess why.
New U.S. sanctions on Russian oil, combined with Russian oil major Lukoil declaring force majeure and canceling shipments from its West Qurna-2 oil field in Iraq, have oil prices marching higher. According to Oilprice.com, both West Texas Intermediate (WTI) and Brent crude prices spiked 1.3% today, and higher prices are pulling oil stock prices higher along with them.
Image source: Getty Images.
Oil prices
WTI crude prices are flirting with $61 a barrel, while Brent crude, the international benchmark, approaches $65 a barrel. That’s not enough to erase the steep slide in oil prices experienced since 2025 began, but it’s a good 6% more than Brent crude fetched as recently as mid-October.
Oil investors should perhaps not get too excited about these developments, however. As Oilprice points out, Brent crude “has been trading within the $63 to $66 per barrel so far in November, a very narrow bandwidth,” and Lukoil’s announcement didn’t have as big an effect on prices as might be expected, considering the field in question used to produce nearly half a million barrels of oil equivalent a day.
Today’s price spike could be less of a trend and more of a blip.
Today’s Change
(3.16%) $2.79
Current Price
$91.02
Key Data Points
Market Cap
$109B
Day’s Range
$88.80 – $91.34
52wk Range
$79.88 – $115.38
Volume
2.4M
Avg Vol
6.6M
Gross Margin
26.79%
Dividend Yield
0.03%
Is ConocoPhillips stock a buy?
What does this mean for investors in ConocoPhillips stock?
Assume today’s price spike doesn’t last, and crude prices continue to trade in their “bandwidth.” At $112.7 billion in market cap, ConocoPhillips stock costs about 12.5 times earnings. With a 3.8% dividend yield and a 5.6% long-term projected growth rate, that works out to a total return ratio of perhaps 1.3 — not expensive, but not yet cheap.
I’d personally hold off on buying ConocoPhillips stock until that number improves even more.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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