Mizuho Securities analyst Nitin Kumar CFA has maintained their neutral stance on XOM stock, giving a Hold rating yesterday.
Nitin Kumar CFA’s rating is based on a combination of factors. The analyst notes that Exxon Mobil is focusing on several key project start-ups scheduled for 2025, which have the potential to significantly boost earnings by late 2026. These projects are expected to contribute over $3 billion in earnings, though the full benefits are anticipated only by the end of 2026. Despite this positive outlook, the weaker performance in Exxon’s Chemicals segment and a less optimistic forecast for Refining are points of concern.
Exxon Mobil is leveraging its integrated operations and cost advantages to counterbalance the pricing challenges it faces. The company is committed to maintaining its capital plan, aiming for strong volume growth in cost-efficient projects. However, the recent derating of the stock and the uncertain outlook for Product Solutions earnings in the near term are reasons for the Hold rating. While the company projects significant shareholder cash returns through dividends and buybacks, the current valuation and market conditions warrant a cautious approach.