Goldman Sachs Flags Weak Q4 Guidance For Exxon Amid Weak Upstream And Chemical Results

by Lekha Gupta Benzinga Editor

Goldman Sachs analyst Neil Mehta expressed views on Exxon Mobil Corporation‘s XOM trading update reported yesterday.

The oil giant anticipates changes in oil prices to reduce fourth-quarter upstream earnings Q/Q by $(0.9) billion to $(0.5) billion.

Conversely, changes in gas prices are expected to impact its upstream results by between $0.0 billion and $0.4 billion.

On the other hand, Exxon Mobil projects that variations in industry margins will impact energy products earnings by $(0.7) billion – $(0.3) billion, specialty products earnings by $(0.1) billion – $0.1 billion, and chemical products earnings by $(0.5) billion – $(0.3) billion.

The analyst writes that implied EPS at the midpoint was ~$1.50, below their estimate of $1.80 and FactSet consensus of $1.76.

The difference is mainly due to weaker-than-expected results in the Upstream, Downstream, and Chemicals segments, adds the analyst.

Mehta writes that implied Upstream earnings were ~$5.7 billion at the mid-point, below their estimate of ~$6.2 billion.

The analyst adds that implied Downstream earnings, including Energy and Specialty Products, were ~$1.0 billion at the mid-point, below their estimate of ~$1.4 billion.

Moreover, implied Chemicals earnings were ~$493 million at the mid-point, falling short of their estimate of ~$853 million.

Goldman Sachs rated the company Neutral with a price target of $125.

Investors can gain exposure to XOM via Vanguard Energy ETF VDE and SPDR Select Sector Fund – Energy Select Sector XLE.

Price Action: XOM shares are down 2.43% at $106.11 at the last check Wednesday.

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