Exxon Mobil (XOM:NYE) Beats on Profit, Misses on Sales

Exxon Mobil Earnings

Exxon Mobil Corpation is one of the world’s largest oil and gas companies, that just reported its fourth quarter results for 2022, which beat earnings expectations but fell short on revenue. The company posted adjusted earnings per share of $3.40, which was higher than the expected $3.29 but lower than the previous quarter. On the other hand, the revenue was $95.43 billion, lower than the expected $97.3 billion. Despite posting its largest ever profit of $55.7 billion in 2022, the stock was trading down 3.3% in premarket sessions as investors are concerned about rising U.S. drilling expenses, which have made oil and natural gas production more expensive.

One factor that may impact Exxon’s future earnings is the decline in production volumes in the fourth quarter compared to the previous year, due to weaker natural gas volumes. Additionally, earnings per share are not expected to rise above $3 in any quarter in 2023 or 2024. As a result, the stock’s performance will be more dependent on its valuation and the value that investors place on its dividend, which currently stands at 3.2%. To improve its valuation, Exxon will need to address two major concerns among investors – its tendency to follow a boom-and-bust pattern and its stance on ESG (Environmental, Social, and Governance) issues.

To address the boom-and-bust pattern, Exxon has become more efficient in recent years, reducing its drilling costs, and expects to be able to cover all its production costs by 2027 even if oil prices fall to $30. The company is also cutting its annual operating expenses by $9 billion from 2019 levels by the end of 2023. On ESG issues, Exxon is investing more heavily in clean energy projects, such as low-carbon hydrogen, carbon capture, and biofuels. If the company can demonstrate progress in these areas, it may attract climate-conscious investors who had previously shied away from the stock.

In conclusion, while Exxon Mobil beat earnings expectations in the fourth quarter, the stock was trading down due to lower-than-expected revenue and rising drilling expenses. Going forward, the company’s performance will depend on its ability to address investor concerns about its tendency to follow a boom-and-bust pattern and its stance on ESG issues. If Exxon can demonstrate progress in its clean energy investments and maintain its dividend yield, it may improve its valuation and attract more investors in the future.

XOM Stock Forecast Price & Analysis

Exxon Mobil Corp’s stock has been performing well over the last year with a 50.85% increase in its stock price.  The latest forecasts from 21 analysts, has the average target price for Exxon Mobil Corp over the next 12 months at USD 118.04. The average analyst rating for the company is a “Strong Buy”, indicating a bullish outlook for the stock in the near future.

Stock Target Advisor’s own analysis of Exxon Mobil Corp is Neutral, which is based on 7 positive signals and 6 negative signals. Despite this neutral outlook, the stock price has seen positive changes over the past week with a +0.71% increase and over the past month with a +2.96% increase. These positive changes in the stock price could be attributed to the company’s strong financial performance and positive analyst ratings.

Exxon Mobil’s Outlook

Exxon Mobil Corp has been making efforts to expand its clean energy portfolio while maintaining its dominance in the oil and gas industry. The company has been investing heavily in low-carbon hydrogen, carbon capture, and biofuels. These investments are a step towards addressing environmental and social governance (ESG) concerns, which could attract more climate-conscious investors back to the stock.

In addition to its investments in clean energy, Exxon Mobil Corp has been focused on improving its efficiency and reducing its operating costs. The company’s CEO, Darren Woods, has stated that the company aims to cover all its production costs by 2027, even if oil prices fall to $30. Executives have also stated that the company is on track to cut its annual operating expenses by $9 billion from 2019 levels by the end of this year.

The company’s strong financial performance and focus on efficiency and clean energy projects are likely to have a positive impact on its stock price in the future. Additionally, Exxon Mobil Corp has a solid dividend yield of 3.2%, which is higher than the average S&P 500 stock yield of 2% and the average energy stock yield of 3%. This attractive dividend yield, combined with a strong financial performance and efforts to address ESG concerns, could make Exxon Mobil Corp an attractive investment for some investors.

In conclusion, based on the average analyst target price and the Strong Buy analyst rating, the near-term outlook for Exxon Mobil Corp appears to be positive. The company’s investments in clean energy and focus on efficiency and cost-cutting measures are likely to have a positive impact on its stock price in the future. Despite the neutral outlook from Stock Target Advisor, the stock could be worth considering for investors who are bullish on the energy sector and are looking for a solid dividend-paying stock.

 

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