BMO Capital Markets has raised its price objective on ConocoPhillips to $115.00 from $105.00 and continues to carry an Outperform rating on the oil and gas producer. The new target is close to a separate fair value assessment, with the stock trading at $104.98 and sitting only 0.97% below its 52-week high of $108.44.
The target increase was implemented even as BMO reduced some of its near-term forecasts in the wake of ConocoPhillips’ fourth-quarter 2025 results and accompanying 2026 guidance. The firm described those results and the outlook as neutral relative to expectations, noting that recent downward analyst revisions are reflected in InvestingPro data showing 18 analysts have trimmed earnings projections for the upcoming period.
BMO attributed the bulk of its negative estimate revisions to two areas: lower 48 depreciation, depletion and amortization (DD&A) and weaker gas realizations. The firm expects these factors to normalize in 2027 and beyond, a view that leaves the company’s net asset value largely intact in BMO’s model.
Operationally, BMO highlighted that ConocoPhillips remains on schedule executing major capital projects, including work tied to its LNG operations and the Willow project. The analyst team also emphasized the company’s capacity to sustain its targeted capital return program, pointing to a conservative leverage profile. Total debt to total capital stood at 0.15 in BMO’s review, and the company has a 55-year streak of dividend payments, with the current yield at 3.2%.
The firm expressed confidence in ConocoPhillips’ Lower 48 resource position, describing the resource base as among the deepest in the industry and a source of medium-term growth optionality and robust free cash flow potential. Over the last twelve months, the company delivered $7.1 billion in levered free cash flow, a metric BMO referenced in support of its broader assessment.
ConocoPhillips’ most recent quarterly report showed adjusted earnings of $1.02 per share for the fourth quarter of 2025, which missed the analyst consensus of $1.18. Revenue for the quarter was $13.82 billion, short of the $14.14 billion that had been anticipated. Those results and the subsequent analyst responses are central to the estimate adjustments noted by BMO and other contributors to the consensus.
While the price target has been raised and the Outperform rating retained, BMO’s model reflects near-term headwinds in DD&A and gas pricing that the firm expects will ease in later years. The combination of continued project delivery, a substantial resource base in the Lower 48, consistent free cash flow and a conservative debt posture underpin BMO’s decision to maintain a favorable view on the company.
Key points:
- BMO raises ConocoPhillips price target to $115 from $105 and keeps an Outperform rating.
- Near-term estimate trims are driven by Lower 48 DD&A and gas realization pressures, with expected resolution in 2027 and beyond.
- Company benefits from strong project execution, significant levered free cash flow ($7.1 billion over 12 months), low leverage (debt/total capital 0.15) and a long dividend history (55 years, 3.2% yield).
Risks and uncertainties:
- Lower 48 DD&A and weaker gas realizations have prompted downward estimate revisions and may continue to pressure near-term earnings - impacting energy sector earnings and valuation metrics.
- Quarterly results that miss analyst expectations, as seen with fourth-quarter 2025 adjusted EPS of $1.02 versus a $1.18 forecast, create uncertainty for investor sentiment in the oil and gas sector.