ExxonMobil Corp (XOM) shares climbed higher in early trading on Monday, fueled by a strong third-quarter earnings report that exceeded analyst expectations. The company’s performance came amidst an exciting earnings season, drawing attention from investors and analysts alike. Let’s delve into what key analysts had to say about the results:
Truist Securities:
Analyst Neal Dingmann maintained a Hold rating for ExxonMobil with a price target of $117. He highlighted that ExxonMobil’s third-quarter earnings surpassed consensus estimates, driven primarily by record production from the Permian Basin. While production outperformed expectations, capex spending was higher than consensus and pricing fell short of estimates, a trend attributed to gas realizations. The company’s refinery business continues to face margin pressures due to strong supply and limited incremental demand for petroleum products.
Despite these challenges, Dingmann noted that ExxonMobil repurchased $5.5 billion in shares during the quarter, a bump from the previous quarter’s $5.3 billion, while also raising its base dividend to 99 cents per share.
RBC Capital Markets:
Analyst Biraj Borkhataria reiterated a Sector Perform rating and maintained a price target of $120 for ExxonMobil. He noted that the company’s earnings of $1.92 per share topped the consensus estimate of $1.87 per share, despite lower expectations due to weaker macroeconomic conditions. Borkhataria attributed the positive surprise to strong performance in Energy products, likely influenced by timing effects.
However, Borkhataria expressed concerns about weak global demand for refined products, which could potentially weigh on earnings into 2025. He also pointed out the possibility of increased cash capex in the medium term as ExxonMobil pursues growth across its upstream, downstream, and low-carbon initiatives over the next few years.
Scotiabank:
Analyst Paul Cheng reaffirmed a Sector Outperform rating with a price target of $145 for ExxonMobil. Cheng highlighted that the company’s earnings and cash flows of $1.92 per share and $3.41 per share, respectively, outpaced consensus estimates of $1.87 and $3.36. While Upstream and Chemicals divisions delivered in-line performance, Energy Products generated $0.3 billion more than expected, while Specialty Products fell slightly short of estimates.
Cheng anticipates that scheduled maintenance in the fourth quarter will negatively impact upstream volumes by 30 mboe/d (thousand barrels of oil equivalent per day). He also projected the company’s capex to reach $28 billion in 2024.
XOM Price Action:
At the time of publication on Monday, ExxonMobil shares were up 3% to $118.60. These results reflect a strong performance by ExxonMobil, exceeding expectations and signaling a positive outlook for the company. Investors will be keenly watching the company’s future developments, particularly its commitment to growth in low-carbon initiatives.
