Exxon Mobil Stock Sits On A $30 Billion War Chest, Record Profit Target

Exxon Mobil (XOM) will report fourth-quarter financial results Tuesday, with analysts expecting the energy giant to close out 2022 with its highest revenue since 2013. Exxon Mobil stock edged lower early Monday.

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In 2022, as the U.S. economy recovered from the Covid pandemic, Russia invaded Ukraine in February, sending oil, gasoline and natural gas prices soaring. This drove Exxon Mobil and Chevron (CVX)and other energy stocks to the head of the stock market, with the companies posting record profits.

Exxon Mobil has averaged 225% EPS growth rate over the last three quarters. In the third quarter, Exxon Mobil and Chevron reported combined net income of more than $30 billion in the third quarter. The Irving, Texas-based Exxon Mobil reported the strongest-ever quarterly profit in its 152-year history.

On Friday, Chevron missed on earnings views while topping revenue estimates. This followed an earlier announcement launching a massive $75 billion share buyback and raising its dividend.

Throughout 2022, President Joe Biden criticized Exxon Mobil, Chevron and several other large producers for choosing to focus on returning money to shareholders instead of spending to increase production.

Late Friday, White House assistant press secretary Abdullah Hasan tweeted that “companies clearly have everything they need — record profits and thousands of approved permits — to increase production.”

“The only thing getting in the way is their own decision to keep plowing windfall profits into the pockets of executives,” Hassan wrote.

Exxon Mobil Stock: Earnings

Estimates: Analysts predict earnings growing 60% to $3.29 per share, and target a 15% sales advance to $97.35 billion. For the full year, Wall Street predicts EPS rising 158% to $13.92. That would top the prior record of $8.47 in 2008. Revenue forecasts see a 50% jump, to $425.94 billion.

Earnings: Check Tuesday morning.

Exxon Mobil announced its five-year corporate plan in early December, reporting it expects to maintain its annual capital expenditures at $20 billion to $25 billion through 2027. The oil giant is also planning to increase its share buyback program to $50 billion through 2024. This is up from the previous $30 billion through 2023. XOM has a $15 billion buy back program in 2022.

Investors will also have an eye on the company’s cash balance. Exxon reported $30.4 billion at the end of Q3, up almost 350% over the $6.8 billion reported at the start of the year.

Along with keeping its annual capital expenditures level through 2027, Exxon Mobil also plans to grow its carbon emissions-cutting investments to around $17 billion through the same period. This represents nearly a 15% increase from current levels. Exxon’s capital investments in 2023 will be in the range of $23 billion-$25 billion.

The company projects earnings and cash flow will double by 2027, compared to 2019. Full year earnings in 2019 were $2.25 per share. Cash flow from operations in 2019 came in at $29.7 billion.

The Oil Market

Ministers from the Organization of Petroleum Exporting Countries and its allies, including Russia (OPEC+) will meet on Wednesday. The Joint Ministerial Monitoring Committee reviews the oil market but has not authority to change production quotas. However, ministers are expected to discuss possible policy tweaks this week.

U.S. crude oil futures were down around 0.3% to $79.45 per barrel Monday. Last week, U.S. crude had regained support above its 50-day moving average line, after settling above that line early last week for the first time since mid-November.

This followed optimistic oil demand forecasts from both the International Energy Agency (IEA) and OPEC.

The IEA estimates the recent easing of Covid restrictions in China will boost 2023 global oil demand to record highs. That news sent U.S. benchmark oil and U.K. benchmark Brent crude to their highest levels since early December. Estimates from the Paris, France-based IEA forecast China’s reopening will drive global oil demand to a record high 101.7 million barrels per day (bpd) in 2023, up by 1.9 million bpd from 2022.

Exxon Mobil Shares

Exxon Mobil stock edged 0.7% lower Monday during pre-trade. XOM shares had dropped 1.8% to 115.61. The stock has formed a flat base and is around 1% up from a 114.76 buy point. Shares have been tracking with the S&P 500 for much of January.

ExxonMobil stock ranks 3rd in the Oil & Gas-Integrated industry group. XOM shares have an 97 Composite Rating out of 99. The stock has an 90 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 80.

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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