ConocoPhillips (NYSE: COP) is set to announce its fiscal first-quarter earnings on Thursday, May 8, 2025, with analysts forecasting earnings of $2.05 per share on $15.91 billion in revenue. This would signify a 1% year-over-year growth in adjusted earnings, alongside a 15% increase in sales compared to the previous year’s figures of $2.03 per share and $13.79 billion in revenue. Historically, COP stock has exhibited a pattern of underperforming after earnings announcements, having declined 58% of the time with a median one-day drop of 1.6% and a maximum observed decline of 6%.
ConocoPhillips has strategically transformed itself into a low-cost oil producer by divesting high-cost assets and reallocating capital into more efficient, lower-cost resources. This shift culminated in the $22.5 billion acquisition of Marathon Oil, which contributed over two billion barrels of oil and gas reserves. The acquisition further reinforced ConocoPhillips’ resource base, which now surpasses 20 billion barrels with an average supply cost of $32 per barrel.
Despite ongoing global economic uncertainty amid persistent trade tensions between the U.S. and major partners, ConocoPhillips remains financially robust. The company anticipates generating enough cash flow to support its $12.9 billion capital investment plan for maintaining and increasing production this year. With a market capitalization of $111 billion, the company reported $55 billion in revenue over the past twelve months, alongside $13 billion in operating profit and $9.2 billion in net income.
For event-driven traders, historical patterns may provide an advantage, whether by positioning themselves prior to earnings or responding to post-release movements. That said, if you are seeking upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception. See earnings reaction history of all stocks.
ConocoPhillips’ Historical Odds Of Positive Post-Earnings Return
A few insights on one-day (1D) post-earnings returns:
- There are 19 earnings data points recorded in the last five years, with 8 positive and 11 negative one-day (1D) returns noted. In summary, positive 1D returns occurred approximately 42% of the time.
- Significantly, this percentage increases to 45% if we consider data from the last 3 years instead of 5.
- The median of the 8 positive returns = 1.8%, and the median of the 11 negative returns = -1.6%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post-earnings is summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A comparatively less risky approach (though ineffective if the correlation is low) is to comprehend the correlation between short-term and medium-term returns after earnings, identify the pair with the highest correlation, and carry out the relevant trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on 5-year and 3-year (more recent) history. Please note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
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