Exxon Mobil (NYSE: XOM), a leading explorer, producer, transporter, and seller of crude oil and natural gas and North America’s largest energy company by market cap, is scheduled to announce its fiscal second-quarter results on Friday, July 29. We expect Exxon Mobil stock to likely remain flat with revenue and earnings both matching market expectations. Higher oil prices have been a major catalyst for Exxon Mobil this year. Although the per-barrel price of oil peaked in March, it continues to be elevated, and remains around $95 per barrel currently, and will likely stay elevated for some time to come – as sanctions against Russian oil exports still remain in place leading to a persistent tight market. The company earned $1.28 earnings per share in Q1 (before the war), and we expect the company’s profits to grow much higher sequentially in Q2 driven by the impact of the Russian invasion of Ukraine. While higher oil prices are clearly a net positive for Exxon Mobil, it is not as impacted by lower oil prices as well (like some upstream oil companies) due to its involvement in extensive refining and chemical businesses.
Our forecast indicates that Exxon Mobil’s valuation is around $94 per share, which is 3% higher than the current market price. Look at our interactive dashboard analysis on Exxon Mobil Earnings Preview: What To Expect in Q2? for more details.
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(1) Revenues expected to be in line with the consensus estimates
Trefis estimates Exxon Mobil’s Q2 2022 revenues to be around $133.1 Bil, in line with the consensus estimate. With its cash from operations rising another 60% year-over-year (y-o-y) in the first quarter, Exxon Mobil expanded its share repurchase program to $30 billion through 2023. Taking advantage of the strong oil price environment this year, Exxon Mobil also expects to increase its Permian Basin production by 25%. It should be noted that there are several high-potential projects from which XOM will benefit for many years to come. One of them is off the coast of Guyana, where Exxon Mobil recently began producing oil. It plans to invest between $20 billion and $25 billion annually in the country through 2027 and expects Guyana (which went from zero production three years ago to 340,000 barrels per day at present) to produce close to 1 million per day by the end of the decade.
Exxon Mobil is also working hard to diversify into renewable energy with technologies like blue hydrogen and carbon capture. The company sees carbon capture and storage becoming a $4 trillion industry by 2050.
(2) EPS likely to match consensus estimates
Exxon Mobil’s Q2 2022 earnings per share (EPS) is expected to be $3.76 as per Trefis analysis, matching the consensus estimate of $3.74. The oil juggernaut’s earnings of $1.28 per share doubled y-o-y in Q1. The company also generated a strong free cash flow of $10.5 billion.
(3) Stock price estimate in line with the current market price
Going by our XOM’s Valuation, with an EPS estimate of around $7.96 and a P/E multiple of around 11.8x in fiscal 2022, this translates into a price of near $94, which is 3% higher than the current market price.
It is helpful to see how its peers stack up. Exxon Mobil Peers shows how XOM stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
|S&P 500 Return||6%||-16%||80%|
|Trefis Multi-Strategy Portfolio||9%||-16%||234%|
 Month-to-date and year-to-date as of 7/28/2022
 Cumulative total returns since the end of 2016