Energy giant Exxon (NYSE:XOM) is likely to receive the Federal Trade Commission’s (FTC) nod to complete its acquisition of Pioneer Natural Resources (NYSE:PXD). This positive development comes after Exxon reached an agreement with antitrust regulators. As part of the deal, they decided not to retain Scott Sheffield, the former CEO of Pioneer, on Exxon’s board of directors, the Wall Street Journal reported.
Exxon agreed to acquire Pioneer Natural Resources in October of last year. However, The FTC raised concerns that Sheffield is potentially engaged in activities that may have artificially inflated oil prices. Nonetheless, there are no allegations of misconduct against Exxon in this matter.
In response to the FTC’s apprehensions, Exxon consented to a decree that prohibits Sheffield from joining its board. With this agreement between Exxon and the FTC, the closure of the Exxon-Pioneer deal is expected to happen shortly.
Exxon Delivered Weak Q1
Exxon delivered weak Q1 financial numbers due to lower commodity price realizations, primarily of natural gas. Moreover, soft refining margins remained a drag. Nevertheless, the company’s shift towards higher-value and higher-margin performance products and focus on structural cost reductions will likely drive its financials in the upcoming quarters.
Is Exxon a Buy, Sell, or Hold?
Exxon stock has gained over 22% year-to-date, reflecting a tightening supply and an expected increase in oil prices. Nonetheless, Wall Street analysts are cautiously optimistic about Exxon’s prospects.
With 11 Buys and six Holds, Exxon stock has a Moderate Buy consensus rating on TipRanks. Analysts’ average price target on XOM stock is $125.31, which implies an 8% upside potential from current levels.
