U.S. and Israeli strikes on Iran sent WTI crude surging over 8% to ~$72/barrel, lifting ConocoPhillips (NYSE:COP) 4.6% in premarket trading and putting it firmly under the investor radar. With a warning of prolonged supply disruption risks if the conflict extends beyond two weeks, Mehta’s bullish thesis on COP carries added weight.
A Decade-Long Growth Story Backed By Numbers
Goldman Sachs analyst Neil Mehta rolls out 2029 and 2030 estimates for ConocoPhillips, finding the company well-positioned to deliver approximately 24% FCF per share CAGR from 2025–2030 at a long-term Brent price of $75/barrel.
In a commodity-neutral environment holding prices flat at 2025 levels, he estimates CAGR closer to 20%. Maintaining a Buy rating, Mehta raises his 12-month price forecast to $125 from $120, reflecting approximately 13% total return potential.
Four Projects, $7 Billion In Incremental Cash Flow
He projects four major growth projects — Willow, NFE, NFS, and Port Arthur — combined with approximately $1 billion in cost reductions and margin enhancements, to generate roughly $7 billion in incremental FCF by 2029 at $70/b WTI. A significant portion of this FCF inflection arrives in 2029 as Willow comes online and capital spend rolls off.
On the Willow project, located on Alaska’s North Slope and targeting peak production of ~180 kbd, operations stand approximately 50% complete. Management remains confident in the project’s scope, timeline, and engineering, with roughly 80% of prior capital guidance revisions attributable to labor, materials, and equipment inflation.
FCF Yields Set To Nearly Double By 2030
Mehta projects COP generating $9.1 billion and $11.7 billion in FCF in 2027 and 2028 at $70–$75/b Brent. That translates to yields of 7% and 9%, respectively.
FCF climbs further to $14.7 billion and $15.5 billion in 2029 and 2030, implying yields of 11% and 12%. Management guides to $12 billion in total capital spend for 2026, declining materially through 2030.
Shareholder Returns Set To Accelerate
COP will likely distribute ~45% of cash from operations, rising to ~50% in 2028–2030 as buybacks accelerate. Total shareholder returns should grow to over $4 billion from 2025–2030, implying a ~10% yield by decade’s end.
Valuation & Key Risks
His valuation blends EV/DACF (8.5x), P/E (14.5x), and a 20-year DCF at 8% cost of capital. EPS estimates stand at $5.11, $7.14, and $9.43 for 2026–2028, and $11.04 and $12.01 for 2029–2030. Key risks include commodity prices, capital spend, and operational execution.
Price Action: COP shares are trading 2.67% higher at $116.49 at the last check on Monday.
Image: Shutterstock
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