Spring, Texas-based Exxon Mobil Corporation (XOM) explores and produces crude oil and natural gas. With a market cap of $518 billion, the company provides exploration and production integrated fuels, lubricants, chemicals, and refined products for automotive, trucking, aviation, and shipping industry to reduce greenhouse gas emissions.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and XOM definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the integrated oil & gas industry. The oil giant is one of the world’s largest publicly traded energy providers and chemical manufacturers that develop and apply next-generation technologies to help safely and responsibly meet the world’s growing needs for energy and high-quality chemical products.
Despite its notable strength, Exxon slipped 6.9% from its 52-week high of $126.34, achieved on Oct. 7. Shares of XOM rose 1.9% over the past three months, trailing behind the Nasdaq Composite’s ($NASX)13.7% gains during the same time frame.
In the longer term, shares of XOM rose 17.7% on a YTD basis and grew 14.3% over the past 52 weeks, underperforming NASX’s YTD gains of 29.8% and solid 36.2% returns over the last year.
To confirm the bullish trend, XOM has been trading above its 200-day moving average since late September. However, the stock has traded below its 50-day moving average recently.
XOM's underperformance is primarily due to the rapid deterioration of macroeconomic conditions, leading to a significant decline in energy prices. This has raised concerns about the company's earnings potential, especially in the face of uncertain oil price trends. Additionally, the increasing market penetration of electric vehicles and the growing popularity of renewable energy sources pose long-term challenges for Exxon.
On Nov. 1, XOM shares closed down more than 1% after reporting its Q3 results. Its EPS of$1.92 beat Wall Street expectations of $1.91. The company’s revenue was $90 billion, failing to meet Wall Street forecasts of $93.5 billion.
Exxon’s rival, Chevron Corporation (CVX)shares lagged behind the stock, with an 8.6% gain on a YTD basis and 11.8% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on Exxon’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts covering it, and the mean price target of $131.45 suggests a potential upside of 11.7% from current price levels.
