Exxon Mobil To Report A Strong Quarter Backed By Higher Price Realization

by Trefis Team
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Exxon Mobil
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Exxon Mobil (NYSE:XOM), the world’s largest publicly traded oil and gas company, is set to report its June quarter financial performance on 27th July 2018. The market expects the company to post a solid performance driven by improved price realization for its upstream operations and higher margins for its refined and chemicals products. We believe that the company’s focus on the Permian Basin and new offshore discoveries in Guyana and Brazil, and LNG opportunities in Mozambique, will drive a large portion of its value in the long term.

We currently have a price estimate of $80 per share for Exxon Mobil, which is slightly below its market price. View our interactive dashboard for Exxon Mobil and modify the key drivers to see the impact on the company’s valuation.

Key Trends To Watch For In 2Q’18 Results

  • Crude oil prices have seen a rebound in the first half of 2018 due to the extension of the Organization of Petroleum Exporting Countries’ (OPEC) production cuts until the end of 2018. The WTI crude oil prices averaged at around $68.06 per barrel for the June quarter, notably higher than the $48.10 per barrel of the same quarter of last year. Accordingly, we expect Exxon to see higher price realization for the quarter, which will, in turn, drive its upstream revenue.

  • Exxon has restructured its downstream operations by integrating its refining and supply division with its fuel and lubricants business. This will aid its downstream profits by streamlining the operations and improving decision making.
  • Exxon is also focused on reducing its exposure to stagnant markets by selling its assets in Indonesia and Japan. The company is said to be in talks to sell downstream assets in other non-profitable, stagnant markets. This divestment program is likely to boost the company’s returns in the near term.

Do not agree with our forecast? Create your own price forecast for Exxon Mobil by changing the base inputs (blue dots) on our interactive dashboard.

 

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