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Here's Why ExxonMobil (XOM) Stock Surges 74.3% in a Year

·4 min read

Exxon Mobil Corporation XOM has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

The company, currently carrying a Zacks Rank #2 (Buy), has gained 74.3% over the past year, outpacing the 45.1% improvement of the composite stocks belonging to the industry.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Factors Favoring the Stock

The price of West Texas Intermediate crude is hovering around the $90-per-barrel mark, highlighting a substantial improvement in the past year. The positive trajectory in oil prices is a boon for ExxonMobil’s upstream operations, as it holds a pipeline of key projects in the Permian, the most prolific basin in the United States.

A huge inventory of well locations in the Permian Basin has brightened ExxonMobil’s production outlook. The company also made multiple world-class oil discoveries at the Stabroek Block, offshore Guyana. ExxonMobil estimated 11 billion oil-equivalent barrels of recoverable resources in the region.

Like upstream businesses, ExxonMobil benefits from its strong refinery utilization. The expansion of its Beaumont Refinery is underway and will get reflected in the extension of refining capacity by 250,000 barrels per day in the first quarter of 2023. The expansion will increase ExxonMobil’s U.S. Gulf Coast refining capacity by about 17%.

ExxonMobil has strong support for transitioning to a lower-emission future. It plans to spend more than $15 billion over the next six years on projects associated with reducing emissions. Notably, XOM’s new initiatives related to lower emissions comprised four large-scale carbon capture and storage opportunities.

The company is committed to maintaining a strong balance sheet and returning capital to shareholders in the future. As of Jun 30, 2022, ExxonMobil’s total cash and cash equivalents were $18.9 billion and long-term debt amounted to $39.5 billion. The firm has significantly lower debt exposure than other integrated majors.

Hence, ExxonMobil, one of the most attractive players in the integrated energy space, is poised for further upside in the coming days.

Other Key Picks

Investors interested in the energy sector can look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

EQT Corporation EQT is a pure-play Appalachian explorer, which is one of the largest natural gas producers in the United States. For 2022, it expects a free cash flow of $2.2-$2.5 billion, suggesting an increase from $934.7 million reported last year.

EQT Corp has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Momentum and B for Growth. EQT is expected to see earnings growth of 323.9% in 2022.

Cheniere Energy Inc. LNG is primarily engaged in businesses related to liquefied natural gas. Ushering in good news for shareholders, LNG recently declared its inaugural quarterly dividend of 33 cents per share. The company’s decision to initiate a payout reflects the dramatic improvement in its fundamentals.

Cheniere Energy has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth. LNG is expected to see earnings growth of 308.7% in 2022.

Marathon Petroleum Corporation MPC is a leading independent refiner, transporter and marketer of petroleum products. The company repurchased shares worth $4.1 billion in the May-July 2022 period and completed more than 80% of its target to buy back common stock worth $15 billion.

Marathon Petroleum has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Value, Growth and Momentum. MPC is expected to see earnings growth of 755.5% in 2022.


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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
EQT Corporation (EQT) : Free Stock Analysis Report
 
Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report
 
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
 
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