Exxon Mobil (XOM) earnings: why is the sentiment negative?

12:32 pm ET, 01 Nov 2018

Exxon Mobil Corporation (XOM) shares are trading at $79.63, flat vs. yesterday. The company is announcing its quarterly earnings results on Friday before the market opens. What's driving XOM stock price? What's XOM stock price forecast?

Exxon Mobil Corporation explores and produces crude oil and natural gas. The stock fell 4% in the past year. With higher oil prices and the company’s restructuring efforts, we could see higher cash flows in the coming quarters.

Investors are showing interest in the company because of strong expected earnings growth and higher price realization in its upstream business.  On the other hand, few bearish investors worry about climate policy changes which could increase costs for Exxon.  Last quarter’s revenue increased 27% to $73.50 billion and earnings per share came at 92 cents compared to 78 cents for the same period last year.

Third-quarter results will be released before market open on November 02, 2018.  Analysts expect the company to earn $1.23 per share on revenue of $73.55 billion.  The company missed analyst estimates three times in the previous four quarters.

What is the sentiment towards the XOM stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative.

Over the last month, Exxon Mobil Corporation (XOM) returned -9.62%.

Exxon Mobil Corporation (XOM) forward P/E ratio is 13.98, and it’s high compared to its industry peers’ P/E ratios.

Exxon Mobil Corporation (XOM) average analyst price target ($88.08) is 13.61% above its current price ($77.53).

For the latest price and information on Exxon Mobil Corporation, please visit Finstead and search for "XOM price" or "XOM news".

Exxon Mobil (XOM) earnings preview: on track to ramp up its capital spending

4:29 am ET, 26 Jul 2018

Exxon Mobil Corporation (XOM) is expected to report earnings on July 27 before market open. The report will be for the fiscal quarter ending June 2018.  Shares are trading at 81.40.

What are XOM earnings expectations?  What do you need to know about Exxon today? 

Exxon is planning to ramp up capital spending with the goal of doubling earnings and cash flow from 2017 levels by 2025 and delivering a return on capital employed of 15%, compared with 7% in 2017. While investors have been clamoring for greater capital discipline from integrated oils, Exxon’s view is that it holds a host of high-return projects that can leverage its superior integrated model and thus warrant the investment.

Exxon is the highest-quality integrated oil overall (operating and assets) and that its downstream and chemicals segments are key differentiators. So it stands to reason that it should invest to maximize those advantages. However, integrated oils have a spotty record of delivering on long-dated volume and return targets.

The upstream segment will lead the charge, with earnings growing threefold and new investments seeing 20% return on capital employed. Exxon has bolstered its portfolio in recent years through discovery (Guyana) and acquisition (Permian, Mozambique), and these new resources will contribute the bulk of its estimated 1 mmboe/d in net production growth. Its 2025 targeted production of 5 mmboe/d represents a 3% CAGR.

Exxon expects to double both downstream and chemical segment earnings by 2025. Investments will focus on leveraging its integrated model, improving yields, and adding capacity to capitalize on low-cost US feedstock and serve growing Asian demand.

Exxon Mobil Corporation has a mixed history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Missed analyst EPS estimates by 5 cents ($.78 actuals vs. $.83 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 8 cents ($.97 actuals vs. $.89 forecast) in FQ3’17;
  • Missed analyst EPS estimates by 18 cents ($.88 actuals vs. $1.06 forecast) in FQ4’17;
  • Missed analyst EPS estimates by 5 cents ($1.09 actuals vs. $1.14 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 58% year-over-year to $1.23, while revenue is expected to grow 12% year-over-year to $70.19 billion.  

Over the last month, Exxon Mobil Corporation (XOM) returned +0.02%.

Exxon Mobil Corporation (XOM) average analyst price target ($86.56) is 6.34% above its current price ($81.40).

For the latest price and information on Exxon Mobil Corporation, please visit Finstead and search for "XOM price" or "XOM news".

Exxon Mobil Corporation (XOM) Stock Guide

Updated at: 8:57 pm ET, 18 Sep 2020

Before we start: if you're looking for XOM stock price, you can quickly find it out by visiting Finny and typing "XOM quote". If you're looking for a quick scoop on XOM stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "XOM". You'll get all this info in one place. Or you can just type "XOM news" to get the latest stock news.

Looking to buy or sell Exxon Mobil Corporation (XOM)? Interested in getting the full scoop on XOM, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this XOM stock guide, we'll address key questions about XOM, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are XOM earnings?
2. What is XOM dividend?
3. What is XOM dividend yield?
4. What is XOM stock forecast (i.e., prediction)?
5. XOM buy or sell? What is XOM Finny Score?
6. What are the reasons to buy XOM? Why should I buy XOM stock?
7. What are the reasons to sell XOM? Why should I sell XOM stock?
8. What are XOM key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are XOM earnings?

XOM trailing 12-month earnings per share (EPS) is $1.68.

2. What is XOM dividend?

XOM forward dividend is $3.48.

3. What is XOM dividend yield?

XOM forward dividend yield is 8.83%.

Analyst Predictions

4. What is XOM stock forecast (i.e., prediction)?

Based on XOM analyst price targets, XOM stock forecast is $47.48 (for a year from now). That means the average analyst price target for XOM stock is $47.48. The prediction is based on 25 analyst estimates.

The low price target for XOM is $37.00, while the high price target is $77.00.

XOM analyst rating is Hold.

Analysis

5. XOM buy or sell? What is XOM Finny Score?

#{finnyScore:71}Our quantitative analysis shows 5 reasons to buy and 2 reasons to sell XOM, resulting in Finny Score of 71.

6. What are the reasons to buy XOM? Why should I buy XOM stock?

Here are the reasons to buy XOM stock:

  • Exxon will see its portfolio mix shift to liquids pricing as gas volumes decline and new oil and liquefied natural gas projects start production. Cash margins should improve as a result.
  • While Exxon will struggle to improve returns materially, it should deliver free cash flow growth to support dividend increases and, eventually, repurchases.
  • With coordination between upstream and downstream operations, as well as integrated refining and chemical facilities, Exxon achieves a high level of integration that creates value, as opposed to simply owning the assets, as peers do.
  • ExxonMobil is the world’s best run integrated oil company based on its track record of high return on capital employed. As the largest publicly traded oil company, ExxonMobil has long been a core holding for investors seeking defensive as well as continued dividend growth. With a stable cash position, the company’s balance sheet is one of the best in the industry.
  • ExxonMobil has merged its refining & marketing businesses. The merger will help the company take better decisions and boost performance. The development will help ExxonMobil generate more cashflow from downstream activities, countering the volatility in its upstream business.
  • ExxonMobil recently discovered oil from the Ranger-1 exploration well, located off the coast of Guyana. It made six oil discoveries in the region since 2015. The company estimated recoverable resources from the prior five discoveries at 3.2 billion barrels of oil equivalent.
  • ExxonMobil announced its intention to boost production from Permian Basin in West Texas and New Mexico. The company is willing to produce more than 600,000 barrels of oil equivalent per day within 2025 from the basin. It is to be noted that over the long term, ExxonMobil is expected to allocate as much as $2 billion for developing midstream infrastructure related to transportation activities.
  • XOM stock price ($37.19) is close to the 52-week low ($36.27). Perhaps now is a good time to buy? See XOM price chart.
  • XOM profitability is improving. The YoY profit margin change was 4.66 percentage points. See XOM profitability chart.
  • XOM forward dividend yield is 8.83%, higher than the industry (0.93%) and sector (0.33%) forward dividend yields. See XOM forward dividend chart.
  • XOM average analyst price target ($47.48) is above its current price ($37.19). See XOM price target chart.
  • XOM cash to debt ratio is 0.18, higher than the average industry (0.10) and sector (0.09) cash to debt ratio. See XOM cash to debt chart.

7. What are the reasons to sell XOM? Why should I sell XOM stock?

Let's look at the reasons to sell XOM stock (i.e., the bear case):

  • With rising resource nationalism, Exxon has found it increasingly difficult to increase production and book reserves. As a result, it's more reliant on higher-cost projects than in the past.
  • Returns are unlikely to ever reach historical levels without higher commodity prices, potentially resulting in compression of Exxon's premium multiple.
  • The expected decline in capital spending may prove only temporary, and Exxon may have to increase spending in several years to maintain production.
  • Despite substantial improvement in oil prices since February 2016, the commodity is still trading much below the level reached during mid-2014. Hence, the persistent weakness in commodity prices remains as overhang on the stock.
  • We are concerned about the integrated energy player’s rising exploration expenses. During fourth-quarter 2017, the company’s exploration cost surged more than 106%. If the trend continues, ExxonMobil’s upstream business will likely be affected.
  • ExxonMobil has collaborated with Russia for exploring potential commercial reserves in the country. However, tensions between the U.S. and Russia might lead the U.S. Government to impose sanctions on Russia. Thus, Exxon’s efforts to generate shareholders’ cashflow by exploiting Russian oil and gas reserves might not pay off.
  • XOM quarterly revenue growth was -52.20%, lower than the industry and sector average revenue growth (-0.18% and -0.04%, respectively). See XOM revenue growth chart.
  • XOM short interest (days to cover the shorts) ratio is 2.06. The stock garners more short interest than the average industry, sector or S&P 500 stock. See XOM short interest ratio chart.

Key Stats

8. What are XOM key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for XOM:

Metrics XOM
Price $35.31
Average Price Target / Upside $47.48 / 34.45%
Average Analyst Rating Hold
Forward Dividend Yield 8.83%
Industry Oil & Gas Integrated
Sector Energy
Number of Employees 71,000
Market Cap $166.72B
Forward P/E Ratio 26.64
Price/Book Ratio 0.78
Revenue (TTM) $213.86B
YoY Quarterly Revenue Growth -52.20%
Profit Margin 3.35%

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