9/17/2023 0 Comments Exxon mobil stations near meWhile all of this doesn’t mean that Exxon Mobil is not a well-run business, especially since the company ended Q1 with $32.7 billion in cash reserves, the issue here is that at this moment in time, it’s hard to see how the company’s shares could significantly appreciate further from the current levels anytime soon. As such, there’s a case to be made that Exxon Mobil’s growth story is coming to an end for now. Even though Exxon Mobil’s profits more than doubled Y/Y during the three-month period, they nevertheless decreased on a quarterly basis as earnings from the upstream segment declined by 21% Q/Q to $6.45 billion mostly as a result of lower oil prices.Ĭonsidering that the Street expects earnings and revenues to be down Y/Y in Q2 and Q3, it would be safe to assume that the oil market has mostly stabilized after the 2022 supply disruptions. The company’s latest earnings report for Q1, which came out in April, showed that the business’s revenues were already down 4.4% Y/Y to $86.56 billion and were also below the street estimates by $3.51 billion. There are now questions about whether there’s any upside left to XOM shares at the current levels. The Growth Story Is Coming To An EndĪfter I published my first rating downgrade article on Exxon Mobil in February, the company’s stock has depreciated by ~10% since that time. Therefore, while Exxon Mobil was a great growth investment last year, its stock is no longer as attractive as before at the current levels. Despite Saudi Arabia’s efforts to ensure that prices remain high via production cuts, it becomes obvious that OPEC+ members no longer support the idea of constant cuts, while the increase of American oil production makes such efforts ineffective. While Exxon Mobil Corporation ( NYSE: XOM) has greatly benefited from higher oil prices in recent quarters, there’s an indication that the market has stabilized, and the potential additional disruptions are unlikely to happen anytime soon. The disruption of oil supplies from last year that was caused primarily by Russia’s invasion of Ukraine is coming to an end.
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