ExxonMobil Corp. is scheduled to report its earnings on Friday [27/10], before market open. The report will be for the fiscal quarter ending September 2023. The $433.74 billion market cap company is currently one of the largest publicly traded multinational oil and gas companies, with the largest petroleum and chemical products marketing and refining operations in the world. The company has long been considered a blue-chip stock as it is an established and financially sound company.
Exxon earlier this month confirmed the acquisition of Pioneer Natural Resources (PXD) in a $59.5bn deal that is said will transform its upstream business. The total implied enterprise value of the transaction, including net debt, is about $64.5 billion. This is the company’s largest acquisition since Exxon acquired Mobil in 1999. According to ExxonMobil, the merger combines Pioneer’s more than 850,000 net acres in the Midland Basin with ExxonMobil’s 570,000 net acres in the Delaware and Midland Basins, creating an industry-leading, high-quality undeveloped US inventory position.
The Zacks Consensus Estimate for ExxonMobil’s third-quarter earnings per share of $2.39 has shown eight upward moves and no downward revisions over the past 30 days. The EPS reported for the same quarter last year was $4.45. The estimated figure shows a decline of 46.3% from the amount reported a year earlier. The Zacks Consensus Estimate for third-quarter revenue of $88 billion indicates a 21.5% decline from the figure reported last year. The Zacks Consensus Estimate for ExxonMobil’s daily production volume is 3,722 thousand barrels of oil equivalent per day, compared to 3,716 MBoe/day in the year-ago quarter.
However, the Zacks Consensus Estimate for ExxonMobil’s earnings after income tax from the upstream segment is pegged at $5,505 million, showing a significant decline from $12,419 million reported in the year-ago quarter. This will most likely affect ExxonMobil’s performance in the third quarter. ExxonMobil currently carries a Zacks rating of #2 (buy).
Oil prices are also in focus due to the impact of the Israel-Hamas war, although this will largely be realised in the company’s fourth quarter. Crude oil prices rose nearly 4.5% in midday trade after the weekend the war broke out between Hamas and Israel. Currently, most analysts believe the impact on oil prices may be limited to an initial spike.
And now, USOil crude oil fell towards $86 per barrel in Monday trading, dropping for the second consecutive session as diplomatic efforts to keep the Israel-Hamas war from spreading into a wider conflict in the Middle East eased some concerns about supply disruptions in the oil-rich region. Aid convoys also began arriving in the Gaza Strip from Egypt at the weekend, while Israel agreed to suspend its offensive against Hamas amid pressure from the US.
On a side note: Oil prices do not need another catalyst to continue moving higher. Oil stocks are already rising due to the supply-demand imbalance. However, geopolitical events, particularly relating to the Middle East, could have a significant impact on the upcoming trades.
Technical Review
Shares of #ExxonMobil fell -1.47% in Monday’s trading [23/10], proving to be a dismal trading session for the stock market, with the USA500 Index -0.17% and USA30 -0.58%. Exxon Mobil Corp. closed at $109.39, below the 50-day EMA level and above the 200-day EMA. Consolidation has been ongoing for the past 12 months in a $100-$120 price range. The immediate support is seen at $104.81, next $100.21 and then the crucial support of $98.00. Nonetheless, the psychological benchmark price of $100.00 seems to have become the barometer in the past year. On the upside, the nearest support is $113.95 and the triple top at $120.68. The RSI technical indicator has dived below the mid-level and the MACD is in the sell zone.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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