2 Analysts Weigh In On Exxon Mobil's Q2 Earnings

Exxon Mobil Corporation XOM reported second-quarter results to mixed reaction from analysts.

The Analysts

Credit Suisse's William Featherston maintains a Neutral rating on Exxon with a $74 price target.

Bank of America's Doug Leggate maintains at Buy, $100 price target.

Credit Suisse: Risks To 2020 EPS

Exxon earned 61 cents per share in the quarter, which fell short of the Street's estimate of 66 cents per share due to weaker performance across all major segments, Featherston wrote in a note. Upstream earnings of $2.8 billion fell 9% from last year, Downstream earnings of $460 million was down 36% year-over-year and Chemicals net income dropped 9% to $186 million.

The company's challenges in the second quarter appear to have carried over to the third quarter as management guided itsUpstream production to be unchanged from the second quarter. Management also indicated it expects to see ongoing weakness in Chemical and R&M margins.

Featherston said Exxon's earnings report marks the second consecutive EPS miss and even if earnings improve in the back half there is risk to the Street's current full-year EPS estimate of $5.07.

BofA: Top Major Oil Pick

Exxon clearly faced headwinds throughout the first half of 2019 but it "has nothing to hide," Leggate wrote in a note. In fact, the company has much to boast, including improved transparency in communicating its strategy.

The case for naming Exxon as a top pick within the major oil group is threefold, including attractive valuation versus the stock's fair value of $100 per share, a dividend yield of 4.5% affords investors to "wait" and a growth story that's now starting to play out.