QS Research · Michael Burry's Scion Capital analyst template · 2006
CONOCOPHILLIPS (COP)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -30% · downside -40% · upside -1%
On normalized FY2020-FY2025 cycle EBITDA of $21.67B at COP's own 5.9x, the equity is worth about $96/share (-29.5% vs $136.27): $21.67B x 5.9 = $127.9B EV, less $13.37B net debt and $0.95B leases, divided by 1.18234B shares. TTM EBITDA is $29.57B, 36% above cycle, and at the same 5.9x it supports only $135.4/share (-0.6%), so today's price already assumes the TTM earnings level persists. Q3 2026 beat was price-driven (realized price +32% YoY) while production fell 4%, and reported EPS included a tax-reserve reversal; the operating base is not as strong as the headline. The balance sheet and 45%-of-CFO return limit solvency risk, but with the base case just shy of the -30% short threshold I call this watch, not short.
Key numbers
- Share price: $136.27
- Market cap: $161.12B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $67.75B
- EV / EBITDA (TTM): 5.9x
- P/E (TTM): 14.0x
- Price / book: 2.44x
The 15 boxes
- ✓ 1. Long-form business notes
ConocoPhillips is a pure-play E&P with five geographic segments (Alaska, Lower 48, Canada, Europe/Middle East/North Africa, Asia Pacific), ~9,900 employees in 14 countries, $122 billion of assets and 2,375 MBOED of FY2025 production; the Lower 48 alone is 1,484 MBOED and supplied 67% of 2025 consolidated liquids and 74% of natural gas. Between the oldest report here (FY2020: 15 countries, six segments, 1,127 MBOED, $63 billion assets) and the latest, the company roughly doubled in scale, with the Concho acquisition closed January 15, 2021 as the step change. Economics are commodity-driven and swing hard: revenue went $13.66B (FY2020) to $61.05B (FY2022), fell 21% to $48.52B (FY2023), then $49.42B (FY2024) and $51.82B (FY2025), with net income to common from -$2.71B to $18.62B to $7.96B over the same endpoints. Operating cash flow has held near $20B a year (FY2023-FY2025: $19.96B, $20.12B, $19.80B) while buybacks ran $5.02B-$5.46B.
- ✓ 2. Competitive advantage
Sources show no durable competitive advantage: COP is a globally diversified E&P company with scale, but it sells into commodity markets, competes with private, public and state-owned firms (some larger), and says no single competitor or small group dominates. Margins and returns are cycle-driven: net income to common went from -$2.71B in FY2020 to $18.62B in FY2022 to $7.96B in FY2025, while operating cash flow held near $20B in FY2023-FY2025. The filings describe technical and portfolio competition, not pricing power, switching costs or a cost advantage.
- ✓ 3. 10-Q takeaways
Q3 2026 was a price-driven quarter: sales and other operating revenues rose to $19,435 million from $15,031 million a year earlier on a 32% higher realized price ($61.40 vs $46.44 per BOE), while production fell 4% to 2,302 MBOED (-2% after adjusting for closed acquisitions and dispositions). Reported earnings of $4,001 million ($3.34 per share) include special items that primarily reflect a tax-reserve reversal; adjusted earnings were $3.9 billion ($3.27 per share) versus $2.0 billion ($1.61) in Q3 2025. Cash generation funded $3.1 billion of capex and $3.4 billion of shareholder returns in the quarter, and management guided Q4 2026 production to 2.32-2.36 MMBOED with full-year capex guidance unchanged.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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