CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target price of $110, cut $11, reflects a 6.5x multiple of enterprise value to projected 2025 EBITDA, in line with XOM’s historical forward average. We cut our 2024 EPS estimate by $1.46 to $8.03 and start 2025’s at $8.41. Q4 EPS of $2.48 vs. $3.40 beat the consensus view by $0.27. Production of 3.82 mmboe/d in Q4 was 2.3% above consensus, helped by growth in the Permian, which XOM believes can rise by a 13% CAGR through 2027. Our downgrade is on a more pessimistic macro outlook for 2024 and 2025, one in which we think crude oil prices average flat to down vs. 2023’s $78/b for U.S. benchmark WTI, and natural gas prices improve only modestly. We think XOM is executing well on the factors under its control, while remaining cost disciplined. We note that returns to shareholders in 2023 (buybacks, dividends) totaled $32.5B, exceeding capex in 2023 ($26B). In the longer term, expansion in the Permian and in Guyana should drive production growth. Shares yield 3.7%.