Market Overview

Exxon Mobil Down On Preview Of Weaker Q3, But Sell-Side Says Warning 'Relatively Benign'

Share:
Exxon Mobil Down On Preview Of Weaker Q3, But Sell-Side Says Warning 'Relatively Benign'

An Exxon Mobil Corporation (NYSE: XOM) securities filing that previews disappointing profits in its upcoming third-quarter report thanks to lower oil and gas prices pushed the stock down on Wednesday.

ExxonMobil’s 8-K filing gave a preliminary hint about third-quarter results, and said the decline in commodity prices could hurt results when it reports Nov. 1.

Sell-side analysts were unmoved to change their stances on the stock, though, with at least one seeking to reassure investors that the commodity price issues that will affect the print don’t reflect major underlying issues.

The Analysts

UBS analyst Jon Rigby kept a Neutral rating and $73 target price on the stock.

Mizuho’s Paul Sankey reiterated a Neutral rating and $79 target price.

Bank of America analyst Doug Leggate reiterated a Buy rating and $100 price target.

The Theses

Analysts did cut estimates for the third quarter, with Sankey dropping his earnings estimate from $1.04 to 65 cents.

An earnings positive reflecting recovery from maintenance downtime will be offset by the lower oil prices, Sankey said, leaving EPS in line with the disappointing second-quarter report. Chemical margins also remain weak, he wrote in a note.

“The implied lower results versus consensus suggest that XOM is still lagging market expectations in restoring earnings/cashflows,” added Rigby.

Leggate also adjusted his estimate downward, from 87 cents to 69 cents, but noted some of that is due to a change to mark-to-market accounting.

Relatively Benign

Leggate also sought to downplay the overall effect of the disclosure, however.

“On balance what amounts to a partial preview of XOM's 3Q19 earnings looks relatively benign and largely a consequence of commodity changes with no material operating issues to change the go forward investment case,” Leggate wrote in a note.

Price Action

Investors were reacting negatively on Wednesday, pushing the stock down 2.35% to $67.30.

Related Links:

8 Energy Stocks Moving In Thursday's Pre-Market Session

No Zip: Energy Sector Q3 Seen Weak Despite Attack On Oil Supplies

Photo credit: Ildar Sagdejev, Wikimedia

Latest Ratings for XOM

DateFirmActionFromTo
Oct 2019MaintainsHold
Oct 2019MaintainsEqual-Weight
Aug 2019MaintainsNeutral

View More Analyst Ratings for XOM
View the Latest Analyst Ratings

Posted-In: Bank of America Doug LeggateAnalyst Color News Guidance Reiteration Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (XOM)

View Comments and Join the Discussion!
Need corporate guidance data?
Click here to see licensing options.

Latest Ratings

StockFirmActionPT
FTVMorgan StanleyMaintains70.0
ROKMorgan StanleyMaintains142.0
WWEFBN SecuritiesUpgrades100.0
SWNCapital One FinancialUpgrades
AEISCowen & Co.Downgrades57.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

This Analyst Says 'Weak' Market Sentiment For Keurig Dr Pepper's Ready To Drink Portfolio Seems Unjustified

Here's How Large Option Traders Reacted To Microsoft's Surface Event