To The Moon

$Exxon Mobil(XOM)$ has announced it will release its Q1 2025 financial results on Friday, 02 May 2025, before the market opens. A conference call with management is scheduled for 8:30 a.m. US Central Time (which is 9:30 PM Singapore Time on Friday, 02 May).

Earnings Per Share (EPS): Consensus estimates generally fall in the range of $1.70 to $1.74 per share. Some sources mention slightly higher figures, but this range appears most common.

Year-over-Year Comparison: This expected EPS represents a decline compared to the $2.06 per share earned in Q1 2024. Analysts primarily attribute this anticipated drop to lower average oil prices in Q1 2025 ($71.38/bbl average) compared to Q1 2024 ($76.91/bbl average).

Sequential Comparison: Compared to Q4 2024 ($1.67 adjusted EPS reported earlier), the Q1 2025 earnings are expected to show a slight improvement. This is largely due to higher realized natural gas prices during the winter quarter and improved oil refining margins, as indicated in ExxonMobil's own pre-earnings update filing. The company signaled these factors could boost earnings by up to $900 million compared to Q4.

Exxon Mobil (XOM) Last Positive Earnings Call Saw A Modest Decline Of 0.22% In Share Price

Exxon Mobil had a positive earnings call on 31 Jan 2025 which saw its share price declined modestly by 0.22%.

ExxonMobil's earnings call highlighted strong financial performance, record production achievements, and progress in low-carbon solutions, despite challenges in cost management and chemical margins. The company's strategic focus on growth and technology-driven businesses shows a positive outlook, although legal and market challenges remain.

Exxon Mobil (XOM) Guidance

In the fourth quarter 2024 earnings call, ExxonMobil provided a comprehensive overview of their performance metrics and future guidance. The company reported earnings of $34 billion, marking it as the third highest result in a decade, and a cash flow from operations at $55 billion. They achieved a return on capital employed (ROCE) of 13%, with a five-year industry-leading average of 11%. Excluding cash balances in capital and projects under construction, the 2024 ROCE rises to about 17%. ExxonMobil highlighted record production across several areas, including the Permian and Guyana, with Permian production expected to grow from 1.5 million oil-equivalent barrels per day in 2024 to 2.3 million barrels per day by 2030. They also emphasized a more than 60% reduction in methane intensity since 2016. The company aims for over $3 billion per year of synergies from combined assets and projects $3 billion in earnings potential from new projects by 2026.

They are focused on expanding in low-carbon solutions, with significant customer contracts and partnerships in carbon capture and hydrogen, aiming for a total addressable market of $100 billion by 2030. ExxonMobil plans to maintain a capital expenditure between $27 billion to $29 billion in 2025, increasing to $28 billion to $33 billion from 2026 to 2030, with a commitment to sustainable shareholder returns.

Key Factors to Watch Exxon Mobil (XOM) Earnings

ExxonMobil reported earnings of $34 billion in 2024, the third highest result in a decade, with a compounded annual growth rate of nearly 30% over five years. The company generated $55 billion in cash flow from operations, also the third highest in a decade.

ExxonMobil achieved record sales of high-value products in 2024, driven by ongoing shifts to a more profitable product mix and divesting non-strategic assets.

Commodity Prices: The impact of realized oil prices (lower YoY but slightly higher sequentially) and natural gas prices (stronger sequentially) on upstream earnings.

Refining Margins: Confirmation of the expected sequential improvement in downstream (Energy Products) earnings due to better refining margins. Exxon's update suggested a $300-$700 million sequential boost from this.

ExxonMobil's chemical margins have been well below the 10-year average, with ongoing challenges in balancing supply and demand in the market.

Chemical Segment: Performance in the chemical business and any improvement in margins.

ExxonMobil contracted more CO2 for transport and storage than any other company by far, with 6.7 million tons per year. The company also announced new equity partnerships and off-take agreements in hydrogen and lithium.

The company is set to start a new facility that can produce 25,000 metric tons of Proxxima products in 2025 and plans to grow to nearly 200,000 tons by 2030. Additionally, ExxonMobil's new technology-driven businesses are expected to create significant opportunities in higher growth, higher margin markets.

Production Volumes: Updates on production levels, particularly from key growth areas like Guyana and the Permian Basin.

ExxonMobil achieved the highest-ever production from its advantaged assets and the highest liquid production from its overall portfolio in more than 40 years. In the Permian, the company delivered record production with expected synergies of more than $3 billion per year from combined assets.

Cash Flow and Shareholder Returns: Figures on cash flow from operations and the level of dividends and share buybacks during the quarter.

Despite achieving structural cost reductions, ExxonMobil faces the challenge of maintaining efficiency and managing costs as it grows. The company aims to achieve an additional $6 billion in structural cost savings by 2030.

Pioneer Integration: Any commentary on the progress of integrating Pioneer Natural Resources, acquired in May 2024, and associated synergies.

Low-Carbon Business: Updates on investments and progress in low-carbon solutions like carbon capture and hydrogen.

Outlook: Management commentary on the outlook for the rest of 2025, given the global economic environment and energy market dynamics.

ExxonMobil filed a lawsuit against the California Attorney General and activist groups for defamation and interference in its advanced recycling business, indicating ongoing legal challenges.

Exxon Mobil (XOM) Price Target

Based on 25 analysts from Tiger Brokers offering 12 month price targets for Exxon Mobil in the last 3 months. The average price target is $123.86 with a high forecast of $144.00 and a low forecast of $93.00. The average price target represents a 18.85% change from the last price of $108.36.

This could change as the concerns of weaker average oil price would bring the investors confidence down, and also if XOM updates on the key growth projects did not turned up desirable, then we could see some downside trade in its share price.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing RSI in a rather flat momentum, and we can see that the stock is trading sideway for the past week, near the 50-day period though, so investors are waiting to see if XOM could beat the lower earnings expectations as the bears are in control.

We need a much better commentary for 2025 to have investors confidence and sentiment come back, there might be weakness in energy sector this week which could affect XOM share price post earnings.

We are selling short interest for a stock decreases, it generally signals that investors are becoming less bearish, potentially indicating a shift towards bullish sentiment.

A decrease in short interest could mean that short sellers are closing out their positions, in XOM case, it looked like investors have already profited from its decline. This can lead to increased demand for the stock as short sellers buy back shares to cover their positions.

Summary

ExxonMobil is expected to report lower earnings compared to the strong Q1 of last year, primarily due to weaker average oil prices. However, sequential improvement from Q4 2024 is anticipated thanks to higher natural gas prices and better refining margins.

It is worth noting that the energy sector overall is projected to report the largest year-over-year earnings decline among all S&P 500 sectors for Q1 2025, mainly due to the lower oil price environment compared to early 2024.

I think we as investors should watch out for cash flow generation, updates on key growth projects (Guyana, Permian, Pioneer), and management's outlook when the report is released on May 2nd.

Appreciate if you could share your thoughts in the comment section whether you think Exxon Mobil could report lower earnings due to lower oil prices in Q1.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.