Exxon Shares Could Be Hurt Near-Term By Q2 Performance; Barclays Cuts Price Target To $100

Shares of Exxon Mobil Corporation XOM could come under slight pressure after the company reported an EPS miss, Barclays’ Paul Y. Cheng said in a report. He maintained an Equal Weight rating on the company, while reducing the price target from $102 to $100.

Exxon Mobil reported its EPS at $0.41, significantly below Barclays’ estimate of $0.67 and the consensus expectation of $0.64. The miss was mainly on account of the disappointing performance from the company’s international upstream operations.

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Exxon Mobil’s results were substantially impacted by the significant sequential decline in international gas prices. “Operationally, performance was good; production averaged 3,957 mboe/d (000s boe/d) compared to our estimate of 3,923 mboe/d, despite disruptions in Nigeria and Canada,” analyst Paul Cheng mentioned.

The EPS estimates for FY1 and FY2 have been reduced from $2.55 to $2.05 and from $5.45 to $5.05, respectively.

Miss Due To One-Time Impacts

While there are concerns around the stability of near-term profits due to the sequential fluctuation in results, none of the major variances in 2Q reflect “ongoing and structural operational issues,” the analyst commented. He added that a recurrence of a level similar to the 2Q earnings was unlikely going forward.

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