Exxon Mobil corp setting for a bigger correctionHello,
Exxon Mobil Corp engages in the exploration, development, and distribution of oil, gas, and petroleum products. It operates through the following segments: Upstream, Downstream and Chemical. The Upstream segment produces crude oil and natural gas.
TECHNICAL ANALYSIS- Checklist
Structure drawing (Trend line drawing on past price chart data)- As shown below
Patterns identification (Naming patterns on past price chart data for future wave)- The price is a corrective pattern. Expanding triangle
Future indication (Reading indicator for future wave)- 0 crossover on MACD. Breakout on the corrective wave could confirm further upside
Future wave (Drawing on future price chart using future indication from indicator)- As shown
Future reversal point (Identifying trend reversal point on price chart using structure)- Target price $126 for exit (no buy opportunity from current price)
Next earnings report date: Jan 31st 2025
Market capitalization: 528.77 Billion
ExxonMobil financial performance for the first nine months of 2024:
Total Revenue and other income at 266.159 billion nine months ended 30th September 2024
Year-to-date earnings were $26.1 billion versus $28.4 billion in the same period last year
Net Income including non-controlling interests at $27.1 Billion, a decrease of $2.2 billion from the prior year period.
Cash and cash equivalents $26.9 billion versus $31.5 Billion in the same period last year
Total liabilities at 185.5 billion versus $163.8Billion in the same period last year
ExxonMobil plans to continue its strategic focus on high-return projects and operational efficiencies, with an anticipated investment level of approximately $28 billion in 2024. The company aims to advance its low carbon business plans, including carbon capture, biofuel production, and other emission reduction initiatives.
Acquisition of Pioneer Natural Resources: Completed on May 3, 2024, this acquisition is expected to bolster upstream production capabilities, particularly in the Permian Basin.
www.tradingview.com
Challenges and Risks
Market Risks: Price fluctuations in crude oil and natural gas, industry refining margins, and chemical margins.
Operational Risks: Integration of the Pioneer acquisition, volume growth and production challenges, and higher expenses from increased depreciation and maintenance activities.
Regulatory Risks: Tax-related items, government mandates, and changes in sustainable production levels due to government-imposed production limits or sanctions.
Emerging Risks: Supply chain disruptions, environmental regulations, and future policies and technological advancements related to emissions reduction and sustainability.
Management’s Strategies: Focus on strategic projects and high-value products, structural cost savings, and prioritizing investments in high-return projects while maintaining a strong balance sheet and consistent shareholder returns.
Our Recommendation
Exxon Mobil remains fundamentally strong with a robust balance sheet, but its stock appears overstretched, presenting some risk. The company’s stock has been trading in a sideways range since February 2023 to date. In October 2024, the company traded at a 52-week high of 126.34, a gain of over 30% just in the year 2024. While a Trump presidency could influence the oil industry, fluctuations in oil prices typically have a more significant impact on oil company stocks. Recently ExxonMobil CEO Darren Woods was quoted to saying “I don’t think the level of production in the U.S. is being constrained by external restrictions,”. He added: “I’m not sure how ‘drill, baby, drill’ translates into policy.”
Given the current price of $120.31, we do not see an immediate buying opportunity. Instead, we recommend exiting around the all-time high of $126.34, as a larger correction in the stock seems likely.
President-elect Donald Trump said that oil and gas industry executive Chris Wright would be his pick to lead the Department of Energy. Wright is the founder and CEO of Liberty Energy. He is a defender of fossil fuel use and is expected to support Trump's plan to maximize production of oil and gas.
Good luck & best of luck.
