Is ConocoPhillips (COP) Among the Top Commodity Producers With the Highest Upside Potential?

We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential. In this article, we are going to take a look at where ConocoPhillips (NYSE:COP) stands against the other Commodity Producer stocks.

Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either.

The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace.

However, the World Bank’s April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic.

Ayhan Kose, the World Bank Group’s Deputy Chief Economist and Director of the Prospects Group, stated:

“Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia’s invasion of Ukraine, and then sinking again,” said Ayhan Kose, the World Bank Group’s Deputy Chief Economist and Director of the Prospects Group. “In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.”

On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve’s 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions.

Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness.

Our Methodology

To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

ConocoPhillips (NYSE:COP)

Analysts’ Upside Potential as of May 01: 37.28%

One of the largest independent exploration and production firms in the world by output and reserves, ConocoPhillips (NYSE:COP), generated 3.1 billion cubic feet of natural gas per day and 1.2 million barrels of oil and natural gas liquids per day in 2023, mostly from Alaska and the Lower 48 in the United States, Norway in Europe, and several countries in Asia-Pacific and the Middle East. At the end of 2023, proven reserves amounted to 6.8 billion barrels of oil equivalent.

It had a strong fourth quarter of 2024. The business reported $14.74 billion in revenue, almost $515 million more than anticipated. It exceeded forecasts by $0.15, with adjusted earnings per share of $1.98. ConocoPhillips (NYSE:COP)’s $22.5 billion purchase of Marathon in November 2024, which expanded its resource base by more than 2 billion barrels of oil and gas with an average supply cost of less than $30 per barrel, was a major highlight of the quarter. The company’s output surged 14.8% year over year after this acquisition, hitting 2.183 million barrels of oil equivalent per day in the quarter.

ConocoPhillips (NYSE:COP) has a strong financial base, making it an attractive option for income investors. The company recorded $20.3 billion in total cash from operations over the previous year, including $20.1 billion in operating cash flow. It continued to distribute $3.6 billion in dividends, showing its dedication to shareholder returns. For the ninth consecutive year, the business increased its quarterly dividend by 34% to $0.78 per share in October.

Overall, COP ranks 5th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of COP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than COP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.