On Monday, UBS analyst Josh Silverstein adjusted the price target for ExxonMobil (NYSE:XOM) shares, bringing it down to $131.00 from the previous $135.00, while maintaining a Buy rating on the stock. Currently trading at $104.21, near its 52-week low of $97.80, InvestingPro analysis suggests the stock is undervalued. Silverstein’s revision followed a detailed consideration of ExxonMobil’s first-quarter earnings.
The analyst revised the first-quarter 2025 earnings per share (EPS) estimate for ExxonMobil to $1.72, a decrease from the earlier projection of $1.75. This updated figure falls below the $1.81 EPS suggested by the company’s 8-K filing. With a P/E ratio of 13.24 and a solid dividend yield of 3.84%, the company maintains strong fundamentals. Silverstein highlighted that certain factors were not accounted for in the 8-K, including the impact of divestitures in Nigeria, Argentina, and the Fos-sur-Mer refinery, as well as a roughly $600 million quarter-over-quarter headwind due to the absence of asset management and tax impacts. Nevertheless, these were somewhat mitigated by the reduction of seasonally higher expenses in the fourth quarter.
Further adjustments were made to the earnings estimates for 2025 and 2026 based on a revised oil price forecast, with Brent crude now expected to be at $66 and $65 respectively. Additionally, the anticipated buyback rate for the second half of 2025 and the full year of 2026 has been reduced to $4 billion.
Despite these changes and a somewhat weaker earnings outlook, UBS continues to see ExxonMobil as a leading investment opportunity in the long term. Silverstein’s optimism is underpinned by several factors including the company’s visible upstream volume growth with improving margins, downstream capacity additions, a robust balance sheet capable of supporting buybacks even when oil prices are lower, and investments in low carbon technologies that could drive potential long-term growth. InvestingPro data reveals the company has maintained dividend payments for 55 consecutive years and boasts a strong financial health score. For deeper insights into ExxonMobil’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Exxon Mobil Corp has released its first-quarter earnings considerations for the fiscal year 2025, providing vital insights into its financial performance. The company’s report, filed with the Securities and Exchange Commission, highlights expectations of an earnings per share (EPS) of approximately $1.81, surpassing both UBS’s and Wall Street’s projections. UBS maintains a Buy rating with a price target of $146, reflecting confidence in ExxonMobil’s financial outlook. Meanwhile, TD Cowen analysts have adjusted their price target for ExxonMobil to $120, down from $125, while still endorsing a Buy rating. This revision is due to anticipated lower earnings in the chemical segment for 2025 and 2026.
In another development, TD Cowen also reduced its previous price target from $128 to $125, noting a modest increase in estimated EPS for the first quarter of 2025. Despite the adjustments, analysts remain optimistic about the company’s share buyback program, projecting minimal risks through 2026. Additionally, the U.S. Federal Trade Commission is seeking public input on a petition by Scott Sheffield, the former CEO of Pioneer Natural Resources (NYSE:PXD), to overturn an order related to Exxon’s acquisition of Pioneer. This acquisition, valued at $59.5 billion, currently restricts Sheffield’s involvement with Exxon. These developments are part of a series of recent events that may influence investor decisions regarding ExxonMobil.
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