Exxon Mobil, an American multinational oil and gas entity, is expected to report its fourth-quarter earnings of $1.73 per share, which represents year-over-year growth of over 5,666%, up from $0.03 per share seen in the same period a year ago.
According to a Reuters report, Exxon announced last week a sharply higher operating profit in oil and gas, prompting Credit Suisse, Scotiabank, and JPMorgan to raise their fourth-quarter earnings estimates. The company will report its Q4 earnings on February 1.
On Thursday, Dec 30, Exxon Mobil in its regulatory filing said that higher oil and gas prices would enable it to achieve annual profitability starting in 2021 with an operating profit increase of up to $1.9 billion.
The U.S. largest publicly traded oil company hinted that oil and gas earnings could decrease by up to $1.2 billion as a result of one-time charges for asset impairments and contractual costs.
“Exxon Mobil (XOM) earnings estimate reflects elimination of $0.7 billion margining headwinds, while a large divestment print will help d/cap fall firmly within its target range. Nevertheless, we do not see this altering distribution guidance. XOM could provide its FY22 capex guidance, which we forecast at $21 billion compared to consensus $20 billion,” noted Jason Gabelman, equity analyst at Cowen.
Exxon Mobil’s shares rose over 48% in 2021. It rose 0.54% to $63.88 in pre-market trading on Wednesday.
Analyst Comments
“Exxon Mobil (XOM) extended its annual capex plan of $20-25 billion through 2027 and now expects to generate a cumulative $100 billion of excess FCF after dividends at $60 real Brent 2022-27, or 40% of the market cap. Strong dividend cover, rapidly improving B/S & robust FCF supports further yield compression,” noted Devin McDermott, equity analyst at Morgan Stanley.
“Improving FCF outlook and dividend sustainability. With a more constructive commodity price outlook, lower capital spending, and additional cash operating cost savings, the dividend is covered in 2021 and averages >100% over the next 5-years on our estimates. Improving dividend sustainability supports yield compression for XOM relative to CVX. Cost cuts defend the dividend. Exxon Mobil (XOM) reduced 2022-25 spending plans to $20-25 billion from $30-35 billion, improving dividend sustainability while limiting further pull on the balance sheet. Additionally, XOM is targeting $6 billion in structural operating cost reductions which should put upward pressure on consensus FCF estimates.”
Exxon Mobil Stock Price Forecast
Fifteen analysts who offered stock ratings for Exxon Mobil in the last three months forecast the average price in 12 months of $72.33 with a high forecast of $95.00 and a low forecast of $50.00.
The average price target represents a 13.83% change from the last price of $63.54. Of those 15 analysts, six rated “Buy”, six rated “Hold” while three rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $87 with a high of $110 under a bull scenario and $48 under the worst-case scenario. The firm gave an “Overweight” rating on the integrated oil company’s stock.
Several other analysts have also updated their stock outlook. Jefferies raised the target price to $62 from $59. JPMorgan lifted the price objective to $83 from $81. Barclays upped the price target to $73 from $71.
Technical analysis also suggests it is good to buy as 100-Day Moving Average and 100-200-day MACD Oscillator signals a buying opportunity.
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This article was originally posted on FX Empire
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