Exxon Mobil Sees Shares Rally, But Prepares Investors For $1.5 Billion Profit Hit

Exxon Mobil Corp. XOM, one of the world’s largest publicly traded international oil and gas companies, has seen its stock price climb approximately 9% over the past month. This recent surge has been primarily fueled by a recovery in global oil prices and a resurgence of investor confidence regarding future energy demand.

However, despite this strong performance, Exxon Mobil issued a cautionary statement on Monday, alerting investors that its second-quarter earnings could decline by roughly $1.5 billion. This projected decrease is attributed to a significant drop in both crude oil and natural gas prices during the quarter.

Breaking down the anticipated impact, company management expects a $1.2 billion hit specifically from lower liquids prices. An additional $0.7 billion impact is foreseen due to weaker natural gas prices.

Also Read: Energy ETFs In Focus After Exxon Flags $1.5 Billion Profit Hit

Furthermore, seasonal demand shifts, planned maintenance activities, and evolving industry margins are also expected to exert downward pressure on the company’s financial results. Exxon Mobil is scheduled to release its second-quarter earnings report on August 1. Analysts are currently forecasting earnings of $1.53 per share for the quarter.

Despite the company’s cautious outlook, Wall Street analysts largely maintain a bullish stance on Exxon Mobil. Ryan Todd, an analyst at Piper Sandler, reiterated an Overweight rating on the stock and raised his 12-month price forecast from $131 to $134. This new forecast suggests a potential upside of 18.2% from current levels, indicating strong confidence in the company’s long-term prospects.

Similarly, Roger Read of Wells Fargo also reaffirmed an Overweight rating, slightly increasing his price forecast from $126 to $127. Over the past year, a total of 43 analyst firms have provided ratings on Exxon Mobil, reflecting broad market interest in the energy giant.

Year to date, the stock has advanced around 6%. It trades well above its 50-day moving average of approximately $107.50, though still below its 52-week high of $126.34.

Price Action: XOM shares are trading lower by 0.43% to $113.71 at last check Wednesday.

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