ConocoPhillips Stock Continues to Fall in 2025. Is There Room for Recovery?

Key Points

• Several catalysts will boost ConocoPhillips' free cash flow in the second half of this year.

• The oil giant's Marathon deal will enable it to produce an additional $1 billion in free cash next year.

• Several longer-cycle projects will add another $6 billion to its annual free cash flow by 2029.

• 10 stocks we like better than ConocoPhillips ›

Shares of ConocoPhillips (NYSE: COP) have slumped more than 7% so far this year. That's a disappointing result, considering that the S&P 500 index has rallied 13.5% in 2025. The primary factor affecting the oil company's stock price has been the decline in oil prices, which have decreased by more than 10% since the start of the year.

While the oil stock is down this year, multiple catalysts could fuel a recovery in 2026 and beyond, even if oil prices don't rally.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Multiple near-term catalysts

Lower oil prices have impacted ConocoPhillips' earnings and cash flow this year. Its adjusted earnings declined from $2.7 billion in the first quarter to $1.8 billion in the second quarter. Meanwhile, its operating cash flow dropped from $5.5 billion in the first quarter to $4.7 billion in the second, while its free cash flow fell from $2.1 billion to $1.4 billion.

However, the company expects several catalysts to boost its free cash flow in the coming quarters. ConocoPhillips anticipates receiving higher cash distributions from its investment in APLNG during the second half of the year. It also expects to start reaping tax benefits from the "one big beautiful bill act" and savings from lower capital spending. These drivers should boost its free cash flow in the back half of the year, even if oil prices don't bounce back.

Additionally, the company continues to integrate its Marathon Oil acquisition, which is proving to be an even better deal than initially expected. The company now believes that the deal will add over 2.5 billion barrels of oil equivalent (BOE) net resources, up from its initial expectation of more than 2 billion BOE. Meanwhile, it initially expected to capture $500 million in annual synergies from the deal, which it has since increased to $1 billion by the end of this year. It now anticipates capturing an additional $1 billion of cost and margin enhancements from that transaction by the end of next year, adding over $1 billion to its free cash flow in 2026.

The coming growth wave

The expected free-cash-flow improvement over the coming year is only the beginning. The company is investing in several long-cycle capital projects that should come online over the next few years and contribute significant incremental annual free cash flow.

Liquefied natural gas (LNG) is one major growth driver. ConocoPhillips formed a strategic partnership with Sempra in 2022 to support the development of Port Arthur LNG Phase 1. The company took a 30% equity interest in the project and agreed to buy 5 million tons of LNG per year from the facility. The project is expected to begin operations in 2027 and generate incremental cash flow for the company through its equity stake and LNG contract.

Additionally, the company partnered with QatarEnergy in 2022 to invest in the North Field East and North Field South projects. Those projects should start up in 2027 and 2028, contributing additional incremental cash flow.

Finally, ConocoPhillips is investing over $7 billion into the Willow project in Alaska. The project will enable the company to tap into a 600-million-barrel resource. It expects to start producing from the 180,000 barrels-per-day project in 2029.

These long-cycle projects provide the company with significant visibility into its future cash flows. ConocoPhillips expects this trio of growth catalysts to add an incremental $6 billion to its annual free cash flow by 2029, with that number rising to $7 billion when factoring in the additional cash flow expected from its continued integration of Marathon Oil. That's a meaningful amount. It's almost double the free cash flow the company expects to produce this year. This outlook assumes oil prices will improve to around $70 per barrel by 2026. The company can still generate a robust $6 billion in additional cash flow if oil prices remain near their current level of around $60 per barrel.

The upcoming surge in free cash flow will enable the company to return even more money to shareholders. ConocoPhillips expects to deliver dividend growth within the top 25% of companies in the S&P 500 in the coming years. It also anticipates repurchasing a meaningful amount of its shares each year.

Ample fuel to drive a recovery

Shares of ConocoPhillips have slumped in 2025 due to lower oil prices. However, it expects its free cash flow to recover in the coming years, fueled by additional synergies from the Marathon deal, its LNG investments, and the Willow project in Alaska. That will give the company more money to return to shareholders. This combination of growing cash flows and rising cash returns should fuel a recovery in the oil stock, making it look like a compelling long-term buy right now.

Should you invest $1,000 in ConocoPhillips right now?

Before you buy stock in ConocoPhillips, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ConocoPhillips wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $661,910!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,125,504!*

Now, it’s worth noting Stock Advisor’s total average return is 1,079% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 22, 2025

Matt DiLallo has positions in ConocoPhillips. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.