What to Look for in Exxon's Earnings Report

Energy

Published: February 1, 2016 1:55 pm

Last Updated: January 13, 2020 1:48 pm

Exxon Mobil Corp. (NYSE: XOM) is expected to release its fourth-quarter earnings before the markets open on Tuesday. Thomson Reuters has consensus estimates of $0.64 in earnings per share (EPS) on revenue of $51.36 billion. The same period from the previous year had $1.32 in EPS on $87.28 billion in revenue.

This company is one of Merrill Lynch’s top 10 picks for 2016. Exxon is an energy sector play that the Merrill Lynch analysts are very positive on long-term, as the overall corporate strength of the massive integrated giant plays a significant part in the company’s usually solid earnings reporting pattern.

The company’s global downstream chemical segment plays a huge part for Exxon. It may be a part that many others on Wall Street don’t fully appreciate as the segment contributes an estimated 16% of overall total revenue. Very solid reasons for adding the stock to a long-term growth portfolio include that the company consistently has demonstrated disciplined investing, operational excellence and technological innovation.

Exxon recently appointed the head of its refining business as its new president, which makes him the probable successor to CEO Rex Tillerson, a move that was designed to avoid raising eyebrows on Wall Street. The new president, Darren Woods, is a 23-year company veteran and should keep the colossus on the steady path for growth and progress.

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For the most recent settlement date, this oil giant saw its short interest rise to 52.19 million shares from the previous level of 50.45 million.

Prior to the earnings report, a few analysts weighed in on Exxon:

JPMorgan has a Neutral rating and lowered its price target to $70 from $77.
Goldman Sachs has a Buy rating with an $86 price target.
Morningstar reiterated a Buy rating.
RBC Capital has a Buy rating and an $82 price target.
Barclays has an Equal Weight rating and lowered its price target to $80 from $85.

So far in 2016, Exxon has outperformed the broad markets, with the stock practically flat year to date. Over the past 52 weeks, the stock is down 8%.

Shares of Exxon were trading at $75.77 on Monday, with a consensus analyst price target of $80.90 and a 52-week trading range of $66.55 to $93.45.

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