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Goldman Sachs sees ExxonMobil shares neutral despite better-than-expected Chemicals results

EditorAhmed Abdulazez Abdulkadir
Published 04/10/2024, 11:18
XOM
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On Friday, Goldman Sachs (NYSE:GS) reaffirmed its Neutral rating on ExxonMobil (NYSE:XOM) shares with a steady price target of $118.00. The firm's analysis followed ExxonMobil's recent 8-K filing, which provided insights into the company's third-quarter 2024 performance.

The mid-point of the implied earnings per share (EPS) for ExxonMobil is approximately $1.92, which is slightly below Goldman Sachs' projection of $2.01 and the FactSet consensus of around $1.96. It's worth noting that recent consensus revisions have adjusted closer to approximately $1.85. The primary variance from Goldman Sachs' expectations stems from weaker-than-anticipated results in the Upstream segment. However, the Downstream and Chemicals segments showed results that were slightly and notably above expectations, respectively.

Goldman Sachs pointed out that the trading update did not account for certain factors. These excluded elements include unplanned downtime at the Joliet refinery, the absence of several one-time gains that were present in the second quarter, and an additional month of contributions in the third quarter versus the second quarter from Pioneer Natural Resources (NYSE:PXD).

The detailed analysis within the trading update aims to shed light on the recent performance and factors affecting ExxonMobil's financial outcomes. The firm's commentary provides investors with a clearer picture of the oil and gas giant's operational results ahead of the official third-quarter earnings release.

In other recent news, Exxon Mobil Corp (NYSE:XOM) has disclosed a predicted drop in third-quarter upstream earnings. The decrease, ranging from $600 million to $1 billion, is attributed to changes in oil prices. This information, crucial to investors, was revealed in a regulatory filing and reflects the volatile nature of the oil market.

Simultaneously, the company has released its third-quarter earnings considerations through an 8-K filing with the Securities and Exchange Commission, demonstrating its commitment to transparency.

In an interesting development, Exxon Mobil along with other major energy companies may have to borrow substantial amounts to sustain shareholder returns due to a recent decline in oil prices. Analysts from RBC Capital Markets have noted that the sector might face a challenging 2025 due to moderating oil prices and weak refining margins.

Furthermore, Exxon Mobil, along with other top U.S. energy exploration companies, has been reported to have paid more than $42 billion to foreign governments. This figure significantly exceeds their payments within the United States, as per disclosures under a new Securities and Exchange Commission regulation.

InvestingPro Insights

To complement Goldman Sachs' analysis of ExxonMobil's (NYSE:XOM) recent performance, InvestingPro data offers additional context for investors. As of the latest available data, ExxonMobil boasts a substantial market capitalization of $544.6 billion, reflecting its position as a major player in the energy sector. The company's P/E ratio stands at 14.62, suggesting a relatively moderate valuation compared to its earnings.

InvestingPro Tips highlight ExxonMobil's financial strength and shareholder-friendly policies. Notably, the company has raised its dividend for an impressive 41 consecutive years, demonstrating a strong commitment to returning value to shareholders. This is particularly relevant given the recent trading update and upcoming earnings release, as it indicates the company's ability to maintain shareholder returns even in fluctuating market conditions.

Another InvestingPro Tip points out that ExxonMobil operates with a moderate level of debt, which could be reassuring for investors considering the company's ability to navigate through various market cycles, including the current period of scrutiny on its quarterly performance.

For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into ExxonMobil's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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