Trying to figure out what to do with ConocoPhillips stock right now? You are not alone. With energy markets fluctuating and investors debating where to find long-term value, ConocoPhillips sits at the center of some big questions. Over the past week, the stock inched up 0.7%, showing a hint of positive momentum. Looking at the past month, that gain stretched to 2.5%. But zoom out, and you will notice a different story, with year-to-date performance down 4.8% and the past 12 months showing an 11.3% drop. It has not all been rough, though. If you step back five years, ConocoPhillips delivered a 227.9% return, easily outpacing many industry peers.

These mixed signals have a lot to do with shifting global energy policies and new market pressures, especially amid renewed debates about oil supply resilience and environmental mandates. While some investors are concerned about volatility ahead, others see growing upside as the company’s fundamentals shine through current noise.

Here is where things get really interesting. By valuation score, ConocoPhillips gets a perfect 6 out of 6. That means across six separate checks for whether the company is undervalued, it passes every single one, which is an impressive feat in any market.

We are about to break down those valuation lenses to see where ConocoPhillips looks cheap, where the narrative may be missing something, and, toward the end, a smarter way to put all the pieces together when the usual metrics just do not tell the whole story.

Why ConocoPhillips is lagging behind its peers

The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and discounting them back to today’s dollars. This method helps investors gauge whether a stock is trading below or above its intrinsic value, based on how much cash the business is likely to generate over time.

ConocoPhillips currently generates Free Cash Flow (FCF) of approximately $8.6 billion, according to the latest twelve-month data. Over the next decade, analyst estimates suggest FCF will steadily rise, with projections reaching $11.3 billion by the end of 2029. Further extrapolations climb to over $15.6 billion by 2035. Five-year projections are informed by analyst forecasts, while long-term estimates beyond that rely on expert modeling and reasonable growth assumptions provided by Simply Wall St.

Bringing all these future figures into today’s dollars, the DCF model puts ConocoPhillips' intrinsic share value at $236.32. Based on this, the stock is trading with an implied discount of 59.7%, signaling it is significantly undervalued relative to its expected cash generation potential.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ConocoPhillips.

Our Discounted Cash Flow (DCF) analysis suggests ConocoPhillips is undervalued by 59.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

When it comes to valuing profitable companies like ConocoPhillips, the Price-to-Earnings (P/E) ratio is a tried-and-true benchmark. This classic metric tells investors how much they are paying for each dollar of a company’s earnings, providing a quick sense of whether the stock is cheap or expensive relative to its profitability.

What counts as a “normal” or “fair” P/E ratio depends on a mix of factors, most importantly growth expectations and perceived risks. Companies with strong growth prospects or lower risks often command higher P/E multiples, while those with slower growth or more uncertainty tend to trade at lower multiples.

Right now, ConocoPhillips trades at a P/E ratio of 13x. To put this in perspective, the industry average in Oil and Gas is about 13.2x, and the peer average stands at 19.3x. On the surface, this suggests the stock is priced quite reasonably compared to its sector and competitors.

But benchmarks only reveal part of the story. Simply Wall St’s “Fair Ratio” goes further by weighing a host of factors beyond simple averages, including earnings growth, risk, profit margin, company size, and industry dynamics. For ConocoPhillips, the Fair Ratio comes out to 19.8x, significantly higher than its current multiple. This tailored approach provides a more holistic view of a stock’s true value than generic comparisons alone.

Comparing the Fair Ratio of 19.8x with the actual P/E of 13x, it is clear the company is trading below what would be expected given its fundamentals and industry outlook.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative is a simple, structured way for investors to connect the story they believe about a company with their own expectations and assumptions to the numbers, such as future revenue, earnings, margins, and a resulting fair value estimate.

Narratives turn what can often feel like abstract financial analysis into a personal roadmap. You outline why you think ConocoPhillips will thrive or struggle, translate that view into forecasts and fair value, and then instantly see how it stacks up against the current share price.

This allows you to move beyond static ratios and consensus targets, making your investing process much more dynamic and reflective of fresh insights or new company news. On Simply Wall St’s Community page, millions of investors create and update their Narratives, meaning fair values are always current as new quarterly results or major headlines emerge.

For example, one investor focused on global LNG projects and strong demand might set a narrative fair value of $137. Another, more concerned about energy transition risks and market uncertainty, could set a fair value as low as $100. Narratives help you compare these viewpoints, decide when the price makes sense for you, and keep your own decision-making grounded in both the story and the numbers.

Do you think there's more to the story for ConocoPhillips? Create your own Narrative to let the Community know!

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.

Companies discussed in this article include COP.

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