Exxon Mobil Corporation (XOM), headquartered in Spring, Texas, is a global energy giant with a market capitalization of $467.6 billion. The company explores and produces crude oil and natural gas both in the U.S. and internationally. Exxon Mobil operates through three main segments: Upstream, Downstream, and Chemical.
Shares of Exxon Mobil have lagged behind the broader market over the past year, with XOM stock gaining 9.7% compared to the S&P 500 Index's ($SPX) 19% rally. However, 2024 has heralded a turnaround for the energy titan, with its stock soaring 17%, eclipsing the SPX’s 14.2% surge on a YTD basis.
Narrowing the focus, XOM has overshadowed the First Trust Nasdaq Oil & Gas ETF (FTXN), which has gained 5.5% over the past year.
Exxon Mobil’s robust price action in 2024 can be attributed to its aggressive pursuit of the burgeoning lower-carbon energy market, including hydrogen, carbon capture, and renewable fuels. A key initiative is developing the world's largest low-carbon hydrogen project in Baytown, Texas, in partnership with Air Liquide. Additionally, Exxon Mobil's focus on high-yield oil projects in Guyana and the Permian Basin, along with effective capital allocation and a strong balance sheet, underscores its resilience and strategic advantage in the global energy market.
Despite the strengths, the stock fell 2.8% on Apr. 26 following the announcement of its Q1 earnings, primarily due to missing analysts' profit expectations. The results were further impacted by reduced earnings from oil and gas production and difficulties in the refining segment caused by higher maintenance costs and mark-to-market derivatives.
For the current fiscal year, ending in December, analysts expect XOM to report an EPS decline of 9.1% to $8.65 on a diluted basis. The company’s earnings surprise history is mixed. It missed the consensus estimate in three of the last four quarters while beating the forecast on one occasion.
Among the 21 analysts covering XOM stock, the overall consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings and nine “Hold.”
This configuration is slightly more bullish than three months ago, with 11 analysts suggesting a “Strong Buy.”
On July 22, 2024, Truist Securities' Neal Dingmann lowered XOM's price target from $124 to $121 while maintaining a “Hold” rating. In a recent sector preview, Dingmann noted that despite challenges such as weak natural gas prices and minimal oilfield services deflation, operating efficiencies have balanced the downsides, keeping the outlook for the current fiscal year and the next year largely unchanged.
The mean price target of $132.85 represents a 13.6% premium to XOM’s current price levels. The Street-high price target of $153 suggests an upside potential of 30.8%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
