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Exxon Mobil (XOM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Exxon Mobil (XOM) closed at $69.75 in the latest trading session, marking a +0.96% move from the prior day. This change outpaced the S&P 500's 0.29% gain on the day. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.19%.

Coming into today, shares of the oil and natural gas company had lost 2.88% in the past month. In that same time, the Oils-Energy sector lost 2.64%, while the S&P 500 gained 0.32%.

XOM will be looking to display strength as it nears its next earnings release, which is expected to be November 1, 2019. On that day, XOM is projected to report earnings of $0.70 per share, which would represent a year-over-year decline of 52.05%. Our most recent consensus estimate is calling for quarterly revenue of $67.87 billion, down 11.4% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.66 per share and revenue of $269.77 billion, which would represent changes of -46.04% and -7.04%, respectively, from the prior year.

Any recent changes to analyst estimates for XOM should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 15.42% lower within the past month. XOM is currently sporting a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, XOM is holding a Forward P/E ratio of 25.99. For comparison, its industry has an average Forward P/E of 13.28, which means XOM is trading at a premium to the group.

Also, we should mention that XOM has a PEG ratio of 2.32. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Integrated - International was holding an average PEG ratio of 1.96 at yesterday's closing price.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 175, putting it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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