Exxon Mobil Stock Analysis: Mixed Signals and Potential for Upside
StockInvest.us, 1 month ago
Technical Analysis
Exxon Mobil Corporation (XOM) closed at $109.45 on October 23, 2023, which represented a -1.47% change. The stock hit a low and high of $108.68 and $110.96, respectively, during the trading session. The trading volume was lower than the average at 5.46 million versus 17.14 million shares. This indicates a lower level of investor activity and could suggest potentially less liquidity in the market.
In terms of specific technical indicators, XOM has a current Relative Strength Index (RSI) of 38, which suggests the stock is currently neither overbought nor oversold. Its 50-day moving average stands at $112.42 and the 200-day moving average is $109.91, which indicates a bearish trend in the short term.
The Moving Average Convergence Divergence (MACD) for the 3-month period is -3.05. This is a bearish signal that can indicate a downward trend. The Average True Range (ATR) is 2.41, suggesting the stock has a moderate level of price volatility.
There also seems to be a strong support level for the share price at $107.17 and a resistance level at $109.87, which are crucial thresholds to watch for future price movements.
Fundamental Analysis
XOM currently commands a market capitalization of $431.32 billion and has roughly 3.96 billion shares outstanding. It demonstrated an earnings per share (EPS) of $12.5 and bears a PE ratio of 8.71 times earnings, which seems reasonably valued compared to the broader market.
The disclosed discounted cash flow (DCF) value stands at $115.89, which, being higher than the current stock price, suggests the stock could be undervalued. However, the consensus target price for the stock is $102.5, below the current price, while target prices range from as low as $46 to as high as $139, indicating a broad divergence in analyst opinion.
As per the consensus recommendation, 12 analysts have rated the stock as a "Buy," while nine have given it a "Hold" rating, suggesting a comparatively more positive outlook of XOM.
News Analysis
Exxon Mobil has recently been in the news due to multiple developments. The company and its competitor, Chevron, are using their cash reserves to clinch major acquisitions through stock-only payment options, leveraging their capacity to make transformative deals despite the volatility of oil and gas prices.
Additionally, XOM's significant exposure to the upstream business indicates its Q3 earnings might benefit from the current favorable conditions in oil prices. Finally, the company's merger with Pioneer may reshape the oil and climate influence, potentially turning the Permian basin into a blueprint for an efficient supply chain.
Prediction and Evaluation
Given the technical and fundamental data, and the recent news, XOM's share price could potentially increase in the next trading day and the upcoming week, encouraged by the upcoming earnings release and the positive sentiment around its upstream business and merger activity.
However, with the recent bearish technical signals and the current price trading above the consensus target, there is a risk of some downside. Therefore, it's best considered as a 'Hold' due to potential short-term uncertainty, while the longer-term outlook, bolstered by Exxon's strategic moves, could be more favorable. Please note this analysis does not constitute investment advice.
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