Should you get rid of ExxonMobil stock right now?
Its removal from the Dow Jones Industrial Average Index has further aggravated investors' concerns about the oil giant, which at one time was the largest listed company by market capitalization. ExxonMobil stock has fallen more than 40% in 2020. But there are reasons why you shouldn't sell this stock just now.
What should investors look for in ExxonMobil Corporation stock?
On the revenue side, Exxon's annual sales have dropped steadily since 2018, and have been in a downward trend for the past decade. Investors generally should look for stocks with sustained quarterly earnings and sales growth of at least 25%.
Why hasn't Exxon Mobil changed its strategy?
The actual strategy change came a few years before that. It probably happened around the time of the change in CEOs. But a company the size of Exxon Mobil will not show a strategy change for several years because the large size of the company means those changes take a while to become significant to quarterly reports.
How does ExxonMobil stock react to crude oil prices?
ExxonMobil stock generally has a high positive correlation with crude oil prices, which reflects the stock's dependence on oil prices. As the above chart shows, the stock's four-month correlation with WTI crude oil price is currently +0.3 -- much lower than what it has been historically.
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Should I hold or sell Exxon stock?
There are currently 2 sell ratings, 8 hold ratings and 11 buy ratings for the stock. The consensus among Wall Street equities research analysts is that investors should "hold" Exxon Mobil stock.
Is Exxon stock a good long term investment?
In the past year alone, the company's stock price has increased by over 51%. With the company's and energy sector's success in 2021, some investors may be wondering if the company is a good long-term investment, and the short answer is yes.
What is the future of Exxon Mobil stock?
Stock Price Forecast The 23 analysts offering 12-month price forecasts for Exxon Mobil Corp have a median target of 102.00, with a high estimate of 128.00 and a low estimate of 77.00. The median estimate represents a +16.08% increase from the last price of 87.87.
Is Exxon worth buying?
XOM stock has a perfect Composite Rating of 99. XOM's EPS Rating is a low 78, but that partly reflects a loss in 2020. Improving earnings performance gives added credibility to a bullish outlook on Exxon Mobil stock. And analysts had expected the price of a barrel of oil to skyrocket to as high as $200.
Will Exxon go up?
Goldman Sachs analyst Neil Mehta sees a 22% return for Exxon on expectations that Brent oil prices will average $135 per barrel in the second half of 2022. And record gasoline prices and refining margins prompted Credit Suisse analyst Manav Gupta to raise his price target to $115 from $102.
Will XOM stock keep going up?
As per the chart presented above, Exxon Mobil thinks that the company's earnings should rise from $22.4 billion in FY 2021 to above $30 billion by FY 2027. Specifically, XOM's net profit is guided to increase by +100% between fiscal 2019 and FY 2025, prior to expanding by an additional +20% between FY 2025 and FY 2027.
What is the target price for Exxon stock?
Stock Price TargetHigh$128.00Low$77.00Average$101.37Current Price$91.48
Are oil stocks a good buy?
Is oil a good stock investment? Oil stocks are a good investment in the near term due to elevated demand and uncertain macroeconomic factors.
When was the last time Exxon stock split?
Exxon Mobil (XOM) has 5 splits in our Exxon Mobil stock split history database. The first split for XOM took place on July 26, 1976....XOM Split History TableDateRatio09/15/19872 for 104/14/19972 for 107/19/20012 for 12 more rows
Has Exxon ever lost money?
Exxon Mobil reported its fourth consecutive quarterly loss on Tuesday as the pandemic continued to weigh on energy demand and oil and natural gas prices. In the worst year for the company in four decades, Exxon said it lost $22.4 billion in 2020, compared with a profit of $14.3 billion in 2019.
How much has Exxon earnings stagnated?
Exxon earnings have stagnated at 0% over the last three years, according to IBD's Stock Checkup. On the revenue side, Exxon's three-year growth rate has fallen 13%. Investors generally should look for stocks with sustained earnings and sales growth of at least 25%.
How much is Exxon's operating cash flow?
Operating cash flow jumped 48% to $9.3 billion while drove a debt reduction of more than $4 billion. Exxon maintained its 2021 capital spending program at $16 billion-$19 billion. In addition to $3 billion in cost cuts in 2020, the company is on pace to achieve $3 billion in more cuts through 2023.
How much money does Exxon have in 2025?
Exxon is in the midst of asset sales that could reach $25 billion through 2025, across Europe, Africa and Asia as it looks to free up more capital to invest in the Permian Basin and massive projects like an oil field in Guyana. Rivals are moving in to expand shale holdings.
How much was Exxon's EPS in Q1?
Exxon reported Q1 EPS of 65 cents on revenue of $59.15 billion, beating analyst expectations. Operating cash flow jumped 48% to $9.3 billion while drove a debt reduction of more than $4 billion.
What company bought CXO?
And in October, ConocoPhillips ( COP) agreed to buy Concho Resources ( CXO) in an all-stock deal valued at $9.7 billion, creating the biggest independent U.S. oil producer. But a potential blockbuster merger could be possible.
When will Exxon report Q2 results?
The company is scheduled to report Q2 results on Friday, July 30. Exxon has remained committed to its dividend even amid pressures during the Covid-19 pandemic, slashing spending and jobs to protect the payout. (Katherine Welles/Shutterstock) In December, Exxon slashed its five-year spending plan.
Is Exxon a shale company?
As demand shrinks, independent U.S. shale companies are scaling back spending to stay within their balance sheets, leaving the door open for oil majors. Exxon became a bigger shale player with a $5.6 billion deal in 2017 to double its oil and gas holdings in the Permian Basin.
How much did Exxon pay in dividends?
Meanwhile, the company's capital investments, even after cost cuts, came in at around $21 billion. On top of that sum, Exxon paid $14.9 billion in dividends and remains committed to supporting its quarterly payments.
What are the risks of Exxon?
1. A changing landscape. One of the biggest risks to Exxon's future is the ongoing global shift toward low carbon energy options. The big fear is that oil and natural gas fall out of use so quickly that Exxon is left with energy assets that have little to no value. This isn't an unreasonable concern, but timing matters.
How long does it take for the world to transition from coal to oil?
Image source: Getty Images. Exxon has pointed out that energy transitions take a very long time, with the shift from coal to oil lasting about 100 years. In other words, while the world is shifting to things like solar and wind power, it could be a very long time before oil and natural gas are out of the picture.
Is drilling for oil and natural gas capital intensive?
One other problem here is that drilling for oil and natural gas is a capital-intensive process. And since the products Exxon produces are commodities, its top and bottom lines can, and do, vary considerably from year to year.
Is Exxon a commodity?
Although already noted, it is important to keep in mind that the core of Exxon's business is built around commodity products. That means it has little control over its top line. And while costs are within the company's control, the business is capital intensive by nature. So Exxon is always on a tightrope, trying to balance revenues and expenses. When oil prices are extremely high that's an easy effort, but when they are low it requires a lot more finesse.
Despite a steep fall, it may not be the best idea to sell ExxonMobil stock right now
ExxonMobil 's ( XOM -1.20% ) troubles don't seem to be ending. Rising debt levels and mega capital spending plans in an unfavorable oil price environment led to a steep fall in the stock's price over the past few years.
1. A stronger balance sheet than global peers
One key factor that contributed to ExxonMobil's survival for more than 100 years is its financial discipline. With rising debt levels recently, though, investors are concerned that ExxonMobil isn't keeping up on this front.
NYSE: XOM
Undoubtedly, ExxonMobil needs to address its rising leverage. The good news is that the company aims to keep its debt level from increasing any further. It plans to reduce operating expenses and defer capital investments to preserve cash for dividends should oil markets continue to languish.
2. ExxonMobil's correlation with oil prices
Like other oil companies, ExxonMobil is actively working on bringing its costs of production down in response to "lower for longer" oil prices. While that's the right strategy for the long term, the company's -- and its stock's -- performance is nonetheless tied to oil prices. Lower realized prices severely hurt ExxonMobil's Q2 performance.
3. ExxonMobil's commitment to dividends
ExxonMobil's stand on dividends is probably the diciest of all its strategies. While many analysts and investors believe that the company should cut its dividends to reduce the burden on its balance sheet, the company wants to take this step only as a last resort. Preserving capital is definitely good for long-term growth.
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