Implied volatility in XOM
In this part, we’ll look at ExxonMobil’s (XOM) stock price forecast range based on its implied volatility for the 14-day period until its earnings. ExxonMobil is expected to post its 1Q18 earnings on April 27, 2018.
Implied volatility in ExxonMobil has risen by 6.3 percentage points since January 2, 2018, to the current 19.1%. During the same period, ExxonMobil stock has fallen 8.5%.
Expected price range for ExxonMobil stock
Considering ExxonMobil’s implied volatility of 19.1% and assuming a normal distribution of prices (bell curve model) and a standard deviation of one (with a probability of 68.2%), ExxonMobil stock could close between $80.8 and $74.9 per share in the next 14 calendar days ending April 27, 2018.
Implied volatility in peers
Implied volatility in Statoil (STO) has risen by 3.6 percentage points over January 2 to 23.0%. Also, implied volatilities in Petrobras (PBR) and PetroChina (PTR) have risen by 9.1 percentage points and 5.1 percentage points, respectively, in the same period. PBR and PTR’s implied volatilities currently stand at 39.4% and 27.4%, respectively. STO, PBR, and PTR’s stock prices have risen 16.0%, 29.5%, and 0.7%, respectively, in the stated period.
Also, the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY), broader market indicators, have seen a rise in their implied volatilities by 7.3 percentage points and 7.1 percentage points, respectively, since January 2. Implied volatilities in DIA and SPY currently stand at 15.6% and 14.0%, respectively. Since January 2, DIA and SPY fell 1.8% and 1.3%, respectively.
In the next part, we’ll review where analyst ratings for ExxonMobil stand ahead of the company’s earnings.