To The Moon

$Exxon Mobil(XOM)$ is scheduled to release its financial results for the fourth-quarter 2024 on 31 January 2025 pre-market.

Analysts estimate XOM to post revenue of USD87.20B for 2024 Q4, up 3.38% from same period last year. The earnings per share is expected to drop 18.48% compared to last year same period to $1.57.

Exxon Mobil (XOM) Last Earnings Call Positive Yet Share Price Drop -6.18%

Exxon Mobil has a positive earnings call sentiment on 01 Nov 2024 when it report the results for the third quarter, but the share price has suffered a loss of -6.18%.

The earnings call highlighted significant achievements, including strong earnings, dividend increases, and advancements in both upstream production and low carbon solutions.

However, challenges like the delay in the Golden Pass project and market conditions in China were noted. Overall, the highlights outweighed the lowlights, reflecting a positive sentiment.

Exxon Mobil (XOM) More Positive Guidance Expected

In the third quarter of 2024, Exxon Mobil reported earnings of $8.6 billion, marking it as one of the best third quarters in the past decade. The company's Energy Products business saw year-to-date earnings double compared to the same period in 2019, attributed to reduced costs, high-return investments, and strategic divestments.

Notable achievements included a $5 billion cost reduction versus 2019, a 24% reduction in turnaround costs, and significant structural cost savings. Exxon Mobil also increased its quarterly dividend by 4% to $0.99 per share, continuing a 42-year streak of annual dividend increases.

The upstream business experienced a 24% year-over-year production increase, reaching 4.6 million oil-equivalent barrels per day, and showcased technological advancements such as drilling record-breaking 18,350-foot laterals on Pioneer acreage.

The company also made strides in low-carbon solutions, working on the world's largest low-carbon hydrogen production facility and securing the largest offshore CO2 storage site in the U.S. Additionally, Exxon Mobil is advancing new technology-driven ventures like Proxxima, with a potential $30 billion market by 2030, aimed at sectors such as infrastructure and automotive.

We could be seeing XOM giving a more positive guidance for 2025 as the new administration would be focusing on oil related energy sector.

Exxon Mobil (XOM) Price Target

Based on 18 Wall Street analysts offering 12 month price targets for Exxon Mobil in the last 3 months. The average price target is $132.83 with a high forecast of $147.00 and a low forecast of $115.00. The average price target represents a 22.23% change from the last price of $108.67.

I would expect XOM to suffer a slight decline post its earnings as investors might take time to comprehend its result

Production Growth And China Market Challenges

Strong Earnings Performance

Exxon Mobil announced earnings of $8.6 billion in Q3 2024, one of the best third quarters in the past decade.

Energy Products Business Improvement

Year-to-date earnings in 2024 have doubled compared to the same period in 2019 on a constant margin basis. Cost reductions achieved, particularly in Energy Products, with a 24% reduction in turnaround costs compared to previous periods.

There are some factors that affect its business improvement in this upcoming quarter, as the third quarter, a tornado caused a shutdown at the Joliet refinery, impacting regional fuel supplies. However, recovery was faster than expected. But for the fourth-quarter the bad weather might be another concern for XOM.

The Golden Pass venture experienced a delay of about 6 months, with the first LNG expected at the back end of 2025. This would be an impact to XOM’s fourth quarter earnings.

Recognition of bottom-of-cycle conditions in the Asia chemicals market, particularly in China, affecting projections. This would be ongoing at least into 2025.

Dividend Increase

Exxon Mobil announced a 4% increase in the quarterly dividend, marking 42 consecutive years of annual dividend increases.

Upstream Production Growth

Production increased to 4.6 million oil equivalent barrels per day, a 24% increase versus the prior year quarter.

Low Carbon Solutions Progress

Advancements in low carbon hydrogen production and carbon capture and storage, including securing the largest offshore CO2 storage site in the U.S.

Technical Analysis - Multi-timeframe (MTF)

If we looked at the technicals on how XOM have been trading, it is trying break through the 200-day MA period, since mid-January, but the effort by the bulls have not be successful.

This has caused XOM to see another decline ahead of its earnings tomorrow (31 Jan) and MACD is forming a bearish MACD crossover, which could mean that we might see a slight correction again despite a positive earnings call.

MTF is also giving a strong downtrend, which mean that XOM might even see a gap down if their revenue comes in less-than-expected.

So I would be monitoring this stock to see if we can take a position because of the low price entry, but provided that we are seeing a potential long-term uptrend.

Summary

XOM might be facing slower production growth due to the weather condition in the fourth-quarter, and also the delay in the Golden Pass venture might cause a longer impact, we could be seeing longer than 6 months delay.

Appreciate if you could share your thoughts in the comment section whether you think XOM would post a less-than-expected earnings and a significant volatile share price movement expected.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.