Exxon Mobil (XOM:NYE) announced that it anticipates a decline in its first-quarter earnings due to lower oil and gas prices and other factors. Lower oil prices are expected to have a negative impact of $600 million to $1 billion on the company’s Q1 upstream earnings, while lower natural gas prices will have a negative impact of $400 million to $800 million. In addition, fluctuations in unsettled derivatives are anticipated to reduce upstream earnings by between $1.8 billion and $2.2 billion.
The decline in energy prices is due to a drop in U.S. petrol prices of more than 50 percent in the first quarter compared to the fourth quarter of 2022, and a drop in global oil prices of almost 7 percent from the fourth quarter to an average of $82 per barrel in the first quarter. Nonetheless, Exxon anticipates a resurgence in oil prices due to the recent production cuts announced by Saudi Arabia and other OPEC+ nations.
Exxon and other major oil and gas companies had a profitable year in 2022 as a result of the Russia-Ukraine war-induced increase in energy prices. Exxon’s EPS increased to $13.26 in 2022 from $5.39 in 2021 as a result of strong cash flows that aided in boosting shareholder returns through $14.9 billion in dividends and $14.9 billion in share repurchases in 2021.
Exxon is optimistic about the long-term prospects of its low-carbon business. The company anticipates that its low-carbon business will generate billions of dollars in revenue within the next five years, and hundreds of billions of dollars within a decade. Exxon recently signed a long-term agreement with Linde (LIN) for the off-take of carbon dioxide associated with Linde’s Beaumont, Texas, clean hydrogen production.
XOM Stock Analysis:
Based on the XOM stock forecast from 29 analysts, the average analyst target price for Exxon Mobil Corp is USD 121.93 over the next 12 months. Exxon Mobil Corp’s average analyst rating is Strong Buy.
Stock Target Advisor’s own stock analysis of XOM stock is Neutral, which is based on 6 positive signals and 6 negative signals. At the last closing, XOM stock price was USD 115.02. Exxon Mobil Corp’s stock price has changed by +7.37% over the past week, +1.96% over the past month and +38.31% over the last year.
Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States and internationally. It operates through Upstream, Energy Products, Chemical Products, and Specialty Products segments. The company was founded in 1870 and is headquartered in Irving, Texas.