Market Overview

ExxonMobil May Need $15B In Debt To Support Dividend, Says MKM Partners

Share:
ExxonMobil May Need $15B In Debt To Support Dividend, Says MKM Partners

Exxon Mobil Corporation (NYSE: XOM) is expected to need approximately $15.6 billion in incremental debt financing over the next years to back its dividend, increasing the oil company's outstanding debt by 22%, according to MKM Partners.

The ExxonMobil Analyst: John Gerdes initiated coverage of Exxon Mobil with a Buy rating and $55 price target.

The ExxonMobil Takeaways: Exxon could lower its capital expenditure to around 3.42 million barrels of oil equivalent per day in 2022, assuming oil prices of $47.50 per barrel in 2021 and $55 per barrel in 2022 and natural gas prices of $3 and $2.80, respectively, Gerdes said in the initiation note.

ExxonMobil could further reduce its capital expenditures to $16-$17 billion annually in the next two years, the analyst said. 

“Given this outlook, the company generates approximately $13.6 billion of aggregate FCF in 2021/2022, and assuming a minimum cash balance of ~$3 billion, which provides ~$0.5 billion of financing entering 2021, implies a need to externally fund ~$15.6 billion of the ~$29.7 billion aggregate dividend payments the next two years.”

XOM Price Action: Exxon shares were trading down 0.97% at $37.60 at last check Thursday.

Latest Ratings for XOM

DateFirmActionFromTo
Sep 2020MKM PartnersInitiates Coverage OnBuy
Aug 2020Morgan StanleyMaintainsEqual-Weight
Aug 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for XOM
View the Latest Analyst Ratings

 

Related Articles (XOM)

View Comments and Join the Discussion!

Posted-In: John Gerdes MKM PartnersAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
WMTOppenheimerMaintains152.0
FBOppenheimerMaintains300.0
ASHEvercore ISI GroupInitiates Coverage On80.0
RPMEvercore ISI GroupInitiates Coverage On90.0
DOWEvercore ISI GroupInitiates Coverage On58.0
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 vipaccounts@benzinga.com