Exxon Mobil Corporation (NYSE: XOM) has confirmed that it will release earnings on Friday, October 29, 2021, before the market open.
What to look for
Exxon Mobil’s Q3 2021 results will benefit from the high oil and gas prices that are likely to boost Q3 earnings by $1.5 billion. Natural gas prices have more than doubled in 2021, with oil prices up 52% as demand rebounds from the pandemic. Another aspect that will reflect in the company's Q3 earnings is the cost-cutting and personnel layoffs after historic loss last year. The low costs and recent oil and gas prices rebound are expected to drive profits higher.
Earnings: Stockearning’s Estimated EPS for Q3 2021 is $1.51 per share. Historical EPS Performance indicates that the company has topped estimates nine times (75%) in the past 12 quarters and missed thrice (25%). Additionally, during the second quarter, the company reported $1.1 per share earnings before dilution, topping estimates of $1.02 per share.
Revenue: The oil and gas company expects revenue of $67.74 billion for the current quarter under review relative to consensus analyst estimates of $63.96 billion. The earnings will be almost $1.5 billion more than Q2’s revenue. The company expects to profit from natural gas to increase by $500 to $900 in Q3 thanks to an increase in natural gas prices.
Stock movement: Exxon Mobil shares have gained 8.3% since the last earnings release. However, the share price has been DOWN 28 times out of the previous 47 quarters following the earnings release. So, the historical price reaction suggests a 59% probability of the share price going DOWN after Exxon Mobil releases Q3 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 1%, while the predicted move on the seventh day is 3%.
What analysts are saying
Morgan Stanley analyst Devin McDermott indicated that the US energy sector has posted gains since the start of the year but pointed that US majors such as Exxon Mobil have underperformed large Cap US E&Ps by a total of 60%. While the analyst feels the E&P strength is acceptable, Exxon Mobil may have lagged too much like its 2022 free cash flow yield is at par or higher than large-cap cash return E&Ps like Devin Energy ConocoPhilips, Pioneer Natural, and EOG Resources. McDermott, who feels that Exxon should trade at a premium yield relative to US E&Ps, but it is not, for now, maintained a "Buy" rating on the stock with a price target of $84.
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