Using an unlevered Free Cash Flow to Firm (FCFF) model, we project ConocoPhillips's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.5% to 0.8% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 40, DPO 54, DIO 14). At a 7.2% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 7.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $161.18 per share, suggesting COP is undervalued by 21.0% at the current price of $133.26.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 16,068 | 16,706 | 18,224 | 19,784 | 19,947 | 20,446 |
| (−) Net Interest | 1,119 | 1,164 | 1,270 | 1,378 | 1,390 | 1,424 |
| (+) D&A | 8,374 | 8,980 | 8,686 | 8,331 | 7,965 | 8,164 |
| EBITDA | 25,562 | 26,850 | 28,179 | 29,493 | 29,302 | 30,034 |
| (−) Tax | 5,555 | 5,776 | 6,301 | 6,840 | 6,896 | — |
| (−) CapEx | 8,354 | 8,686 | 9,475 | 10,286 | 10,371 | — |
| (−) ΔWC | 657 | 84 | 201 | 206 | 22 | — |
| Free Cash Flow (FCF) | 10,996 | 12,304 | 12,203 | 12,161 | 12,013 | — |
| Peers' EBITDA Multiple | 7.5x | |||||
| Terminal Value | 225,557 | |||||
| WACC / Discount Rate | 7.17% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 10,622 | 11,091 | 10,264 | 9,545 | 8,797 | 159,567 |
| Enterprise Value | 209,885 | |||||
| Projection Period | 50,318 | 24.0% | ||||
| Terminal Value | 159,567 | 76.0% | ||||
| (−) Current Net Debt | 16,947 | |||||
| Equity Value | 192,938 | |||||
| (÷) Outstanding Shares | 1197M | |||||
| Fair Price | $161 | +21.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 3.5x | 5.5x | 7.5x | 9.5x | 11.5x |
|---|---|---|---|---|---|
| 5.2% | $98 | $137 | $176 | $215 | $254 |
| 6.2% | $94 | $131 | $169 | $206 | $243 |
| 7.2% | $90 | $126 | $161 | $197 | $232 |
| 8.2% | $86 | $120 | $154 | $188 | $222 |
| 9.2% | $83 | $115 | $148 | $180 | $212 |
Current price: $133.26. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.