Analysts’ Views on ExxonMobil, Pre-4Q17 Results

Analysts’ ratings for ExxonMobil

In this series, we’ve examined ExxonMobil’s (XOM) 4Q17 estimates, segment-wise earnings outlook, and stock performance. We also reviewed ExxonMobil’s stock forecast range for the 14 days leading up to its earnings release on February 2, 2018. In this part, we’ll examine analysts’ ratings for ExxonMobil. Of the 25 analysts covering ExxonMobil, eight (32%) have recommended “buy” or “strong buy,” 12 (48%) have recommended “hold,” and five (20%) have recommended “sell” or “strong sell.”

Analysts’ Views on ExxonMobil, Pre-4Q17 Results

Why analysts have mixed opinions on ExxonMobil

ExxonMobil’s (XOM) expansion activities, spread across its business segments, are making its earnings model more integrated, shielding it partially from oil price volatility. Its inorganic and organic growth strategy in its upstream segment will likely grow its upstream portfolio. Plus, ExxonMobil’s expansion and modernization activities in its downstream (refining and chemicals) segment will likely raise its downstream earnings. For more on ExxonMobil’s capex and growth activities, read How Prepared Is ExxonMobil for 2018?

ExxonMobil may have received mostly “hold” or “sell” ratings because of its valuation placing highly within its peer group. Market participants have probably already factored in XOM’s expected growth and relatively sound financials.

Analysts’ ratings for peers

Peers Total (TOT), Statoil (STO), and YPF (YPF) have been rated “buy” by 17%, 20%, and 86% of analysts, respectively, and Chevron (CVX), BP (BP), and Royal Dutch Shell (RDS.A) have been rated “buy” by 58%, 46%, and 91% of analysts.