Forecasting ExxonMobil’s Stock Price

Implied volatility in XOM

In this part, we’ll look at ExxonMobil’s (XOM) 14-day stock price forecast based on its implied volatility. ExxonMobil is expected to post its 4Q17 earnings results on February 2, 2018. ExxonMobil’s implied volatility has risen 1.6% since October 2, 2017, to 14.6%. During the same period, its stock has risen 6.8%.

Forecasting ExxonMobil’s Stock Price.

Expected price range for ExxonMobil stock

Considering ExxonMobil’s implied volatility of 14.6% and assuming a normal distribution of prices (a bell curve model) and standard deviation of one with a probability of 68.2%, ExxonMobil stock price could close between $89.60 and $84.70 per share in the next 14 calendar days ending February 2, 2018.

Peers’ implied volatility

Since October 2, 2017, BP’s (BP) implied volatility has risen 3.5% to 18.3%, and PetroChina’s (PTR) and Suncor Energy’s (SU) has risen 4.0% and 0.8%, respectively, to 23.1% and 20.6%. BP’s, PTR’s, and SU’s stock prices have risen 10.4%, 16.8%, and 6.8%, respectively. Meanwhile, the SPDR Dow Jones Industrial Average ETF’s (DIA) and SPDR S&P 500 ETF’s (SPY) implied volatility has risen 1.5% and 1.9%, respectively, to 9.3% and 8.2%. During the same period, DIA’s and SPY’s values have risen 15.7% and 11.4%, respectively. In the next part, we’ll review analysts’ ratings for ExxonMobil before its earnings announcement.