Goldman Sachs analyst Neil Mehta expressed views on Exxon Mobil Corporation's (NYSE:XOM) trading update reported yesterday.
The oil giant anticipates changes in oil prices to reduce fourth-quarter upstream earnings Q/Q by $(0.9) billion to $(0.5) billion.
Conversely, changes in gas prices are expected to impact its upstream results by between $0.0 billion and $0.4 billion.
On the other hand, Exxon Mobil projects that variations in industry margins will impact energy products earnings by $(0.7) billion – $(0.3) billion, specialty products earnings by $(0.1) billion – $0.1 billion, and chemical products earnings by $(0.5) billion – $(0.3) billion.
The analyst writes that implied EPS at the midpoint was ~$1.50, below their estimate of $1.80 and FactSet consensus of $1.76.
The difference is mainly due to weaker-than-expected results in the Upstream, Downstream, and Chemicals segments, adds the analyst.
Mehta writes that implied Upstream earnings were ~$5.7 billion at the mid-point, below their estimate of ~$6.2 billion.
The analyst adds that implied Downstream earnings, including Energy and Specialty Products, were ~$1.0 billion at the mid-point, below their estimate of ~$1.4 billion.
Moreover, implied Chemicals earnings were ~$493 million at the mid-point, falling short of their estimate of ~$853 million.
Goldman Sachs rated the company Neutral with a price target of $125.
Investors can gain exposure to XOM via Vanguard Energy ETF (NYSE:VDE) and SPDR Select Sector Fund – Energy Select Sector (NYSE:XLE).
Price Action: XOM shares are down 2.43% at $106.11 at the last check Wednesday.
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