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Exxon Mobil (XOM) Technical Analysis Indicates Cautious Bearish Sentiment

StockInvest.us, 3 weeks ago

Exxon Technical Analysis

Exxon Mobil Corporation (Ticker: XOM) closed the last trading session at $117.96, reflecting a decline of $3.37, or -2.78%. The stock traded between a daily high of $119.10 and a low of $116.22. Current technical indicators suggest a cautiously bearish sentiment:

- The Relative Strength Index (RSI) at 39 indicates that the stock is neither overbought nor oversold, leaning towards a potential downtrend. - XOM is currently trading above its 50-day moving average ($113.08) and 200-day moving average ($107.88), suggesting a general bullish trend in the medium to long term. - The Moving Average Convergence Divergence (MACD) stands at 2.75, supporting the prevailing upwards momentum. For the next trading day, the stock might see minimal volatility with the Average True Range (ATR) at 1.92 indicating moderate daily price movement.

Fundamental Analysis

Exxon's current market capitalization stands at approximately $468.05 billion, with a Price-to-Earnings (P/E) ratio of 13.27, which is relatively low in the energy sector, suggesting undervaluation. The earnings per share (EPS) of $8.89 reinforce a strong earnings base. The recent earnings report disclosed a 28% decline in year-over-year profits, impacting the stock negatively.

Despite short-term setbacks, XOM shows promise in long-term value creation, as indicated by the robust 10.26 billion shares outstanding. Additionally, recent endeavors into CO2 removal technology highlight a strategic pivot towards sustainable practices, although currently cost-prohibitive, which could lead to substantial future returns once commercialized.

Market Sentiment and Analyst Consensus

Exxon Market analysts show a favorable outlook towards XOM with a consensus rating of 'Buy' among 25 analysts (17 "buys", 8 "holds", and no "sells"). The consensus target price stands at $115.46, slightly below the current price, reflecting a potential correction. The highest target at $150 underlines significant upside potential, dictated by long-term strategic moves and stabilization in earnings.

Intrinsic Value and Investment Potential

The Discounted Cash Flow (DCF) model places XOM's intrinsic value around $146.58, significantly higher than the current trading price, suggesting that the stock is undervalued. This underpricing paired with solid fundamentals proposes a compelling case for long-term investment.

Recent News Impact

Recent news on earnings, technology for CO2 removal, and analysts' take on acquisitions are shaping investor perceptions. The decline in profits and missed earnings expectations has pressured the stock downward. However, efforts towards innovative technology, as discussed by CEO Darren Woods, could reshape investor confidence once operational and cost-effective hurdles are overcome.

Overall Stock Evaluation

In considering Exxon Mobil's robust financial base, ongoing strategic initiatives, current undervaluation, and market sentiment, the stock can be categorized as a 'Buy' for the long-term investor. The forecast for the next trading day and the subsequent week suggests stability with a chance of cautious upside recovery, influenced by recent earnings and strategic announcements.

The outlook for Exxon Mobil is cautiously optimistic, leveraging strong fundamentals against short-term market reactions to recent earnings. Investors might consider the stock's potential for appreciation in the context of broader energy sector dynamics and long-term strategic pivots towards sustainability.

Check full Exxon forecast and analysis here.