Market Overview

Exxon Mobil Shares Higher; Sell-Side Has Mixed Reaction To Q3 Report

Exxon Mobil Shares Higher; Sell-Side Has Mixed Reaction To Q3 Report

Exxon Mobil Corporation (NYSE: XOM) shares continued on an upward trajectory Monday after last week's better-than-expected earnings report that came alongside falling global oil and gas prices. The sell side's reaction to the print has been mixed.

On Friday, Exxon reported third-quarter earnings of 75 cents per share, ahead of the Street’s 67-cent estimate. Sales of $65.05 billion were slightly ahead of estimates.  

The Analysts

Bank of America Merrill Lynch analyst Doug Leggate reiterated a Buy rating on Exxon with a $100 price target.

Credit Suisse analyst William Featherston remained Neutral with a $74 target price.

A Bullish Take 

Leggate said momentum is building behind Exxon Mobil's plan to double cash flow through 2025.

An inflection in Permian Basin production is "well underway," the analyst said, adding that new oil from drilling in Guyana coming in December will start what he said should be seven or eight years of production growth. 

The analyst also cited progress on asset sales, starting with the $3.5-billion sale of its Norwegian oil and gas assets.

"We believe ExxonMobil is poised for a relative recovery after several years of lagging performance," he said.

Exxon Mobil has spent the last few years starting major projects with better cash margins than the legacy base business, Leggate said. 

"We continue to believe XOM’s strategy of investing counter to the industry cycle is reloading growth opportunities at advantaged costs, creating capacity for ratable dividend growth." 

Cash Flow Deficits

Featherston remained sidelined and said he expects the company to post large organic free cash flow deficits as it starts a multiyear period of counter-cyclical investing while other companies improve cash flow and increase cash returns to shareholders.

"We believe investors are paying a material premium for XOM despite in-line growth, comparable (return on capital employed) and an undifferentiated dividend yield" compared to peers." 

Price Action

Exxon shares were up 3% at $71.69 at the time of publication Monday. 

Related Links:

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

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

Photo by Michael Rivera via Wikimedia

Latest Ratings for XOM

Oct 2020Morgan StanleyMaintainsEqual-Weight
Oct 2020Goldman SachsUpgradesSellNeutral
Sep 2020ScotiaBankUpgradesSector UnderperformSector Perform

View More Analyst Ratings for XOM
View the Latest Analyst Ratings


Related Articles (XOM)

View Comments and Join the Discussion!

Posted-In: Bank of America Merrill LynchAnalyst Color Earnings News Price Target Reiteration Top Stories Analyst Ratings Best of Benzinga

Latest Ratings

CATBHC Wainwright & Co.Downgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
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