We started this series by analyzing ExxonMobil’s (XOM) fourth-quarter segmental earnings. We discussed how ExxonMobil stock performed after its earnings. In the previous part, we discussed analysts’ ratings for ExxonMobil.
In this part, we’ll discuss the changes in ExxonMobil’s implied volatility. We’ll also estimate ExxonMobil’s stock price range for the seven days ending on February 8.
ExxonMobil reported its fourth-quarter earnings on February 1. The implied volatility in ExxonMobil fell by 3.8 percentage points compared to the previous day to 16.6% on February 1. The implied volatility was lower than ExxonMobil’s 30-day average implied volatility, which was 25.5%. On the same day, ExxonMobil’s stock price rose 3.6%. On February 1, the implied volatility in ExxonMobil and its stock price moved inversely.
Expected price range
Considering ExxonMobil’s implied volatility of 16.6% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), ExxonMobil’s stock price could close between $77.7 and $74.2 per share in the seven days ending February 8.
Peers’ implied volatility
Like ExxonMobil, the implied volatility in PetroChina (PTR) fell by 4.4 percentage points compared to the previous day to 27.9% on February 1. The implied volatility in YPF (YPF) and Suncor Energy (SU) fell by 0.7 percentage points and 1.5 percentage points to 34.2% and 23.5%, respectively, on February 1.
If we consider these companies’ stock performance on February 1, then PetroChina, YPF, and Suncor rose 0.6%, 0.9%, and 0.2%, respectively.