ExxonMobil shares up 20% YTD. Here are the next price targets

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Feb 8, 2021
  • ExxonMobil shares are advancing last several weeks
  • CEO Darren Woods said last week that even with $50/bbl Exxon could pay dividends
  • $55 represents a strong resistance level

ExxonMobil (NYSE: XOM) shares have advanced more than 20% since the beginning of January, and the current share price stands around $52. Stock markets are advancing at the beginning of the week, while the further stimulus’s expectations also lifted Brent crude oil prices above $60 a barrel.

Fundamental analysis: Exxon can pay dividends with $50/bbl

ExxonMobil shares are advancing last several weeks, and the technical picture implies that the price could advance even more this February. Investors remain optimistic about the large U.S. stimulus package, but it is also important to mention that positive corporate earnings and progress on vaccine rollouts keep the market in a positive mood.

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ExxonMobil reported Q4 results this February; total revenue has decreased by -30.7% Y/Y to $46.54B while Q4 GAAP EPS was -$4.70 (missed by $3.42). Total revenue has decreased above the expectations ( missed by $2.22B), and the company reported a net loss of $22.44B for FY 2020 compared with a profit of $14.34B in 2019.

The production in Q4 fell more than 8%, but this was mainly due to the covid pandemic. ExxonMobil expects a successful 2021; according to the company’s management, cash flow will cover capex and maintain the dividend and strong balance sheet.

“The past year presented the most challenging market conditions ExxonMobil has ever experienced. The cost structure improvements are expected to deliver structural expense savings of $6B/year by 2023 relative to 2019,” said Chairman and CEO Darren Woods.

Some analysts say that ExxonMobil requires at least $60/bbl oil to cover its dividend in 2021, but CEO Darren Woods said last week that even with $50/bbl, Exxon could pay dividends.

“The company could adjust capital spending with swings in the oil price and still generate enough cash to pay the dividend at $50/bbl Brent. But even if downstream improves, we still estimate a greater than $60/bbl dividend breakeven (excluding asset sales) in 2022 given that capex is expected to increase to at least $20B,” said CEO Darren Woods.

ExxonMobil’s 7% dividend looks safe, and this company is still a hated, cheap stock that should be on your watch list.

Technical analysis: $55 represents a strong resistance level

Data source: tradingview.com

ExxonMobil shares have advanced from $41 above $52.3 since the beginning of January, and the current price stands around $52. The critical support levels are $45 and $40; $55 and $60 represent the important resistance levels.

If the price jumps above $55, it would be a signal to buy shares, and the next target could be around $57.5, but if the price falls below the $45 support level, it would be a firm “sell” signal.

Summary

ExxonMobil shares are advancing last several weeks, and CEO Darren Woods said last week that even with $50/bbl, Exxon could pay dividends. ExxonMobil expects a successful 2021; according to the company’s management, cash flow will cover capex and maintain the dividend and strong balance sheet.

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