Earnings Previews: Chevron, Exxon Mobil, Phillips 66, Weyerhauser

Exxon Mobil

Shares of Exxon Mobil Corp. (NYSE: XOM) have risen by about 61% over the past 12 months. Since a recent low in mid-December, the stock has gained 45.2%. Everything we said earlier about Chevron is at work for Exxon as well. An added issue for both these integrated giants and their independent producer rivals is the threat of a slowdown in China’s economy due to the country’s No-COVID policy and ensuing lockdowns. An end to the Russian invasion of Ukraine would send crude prices lower as well.

Of 27 analysts covering the stock, 17 rate the shares at Hold, five have a Strong Buy rating and four more rate the shares at Buy. At a share price of around $84.80, the upside potential based on a median price target of $95 is 12%. At the high target of $120, the upside potential is nearly 41.5%.

First-quarter revenue is forecast at $83.57 billion, down 1.6% sequentially but 46.4% higher year over year. Adjusted EPS are pegged at $2.23, up 8.7% sequentially and 243% year over year. For full fiscal 2022, current estimates call for EPS of $9.38, up 74.3%, on sales of $366.4 billion, up almost 28.3%.

Exxon shares trade at 9.0 times expected 2022 EPS, 10.1 times estimated 2023 earnings of $8.34 and 11.0 times estimated 2024 earnings of $7.72 per share. The stock’s 52-week range is $52.10 to $91.50, and Exxon pays an annual dividend of $3.52 (yield of 4.28%). Total shareholder return for the past 12 months was 58.4%.

Phillips 66

Typically, when oil prices rise, refiners’ stocks decline because their input costs rise. A lot of that can be passed along to consumers, but not all of it. Over the past 12 months, with crude oil up 62%, Chevron stock is up 62.0%, Exxon stock is up 60.5% and shares of Phillips 66 (NYSE: PSX) are up about 14.4%. Because crude prices have been relatively low over the past 10 years, Phillips 66 shares are up almost 230%, compared with a rise of 124% in Chevron stock and 49.5% in Exxon stock.

Analysts remain mostly bullish on the stock, with 14 of 17 brokerages assigning a Buy or Strong Buy rating and the other three having a Hold rating. At a share price of around $83.70, the upside potential based on a median price target of $100.50 is 20.1%. At the high price target of $119, the upside potential is 42.2%.

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