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2020-08-24 11:00

The first six months of the ongoing calendar year were unprecedently challenging for the global energy sector. Thanks to its massive size, however, ExxonMobil (NYSE: XOM) has been able to show resilience in recent months despite a historic low in oil prices due to the Coronavirus pandemic, that pushed it into suspending its contribution to the retirement savings plan for the U.S. employees in the first week of August.

The company started the year 2020 in the stock market at a per-share price of $71. By late March, the stock had already tanked by over 50% due to COVID-19 disruptions. Shares of the company showed early signs of recovery with the start of April and touched a high of almost $55 per share in May. ExxonMobil currently has a market cap of $177 billion.

Exxon remains interesting for the investors
Exxon still has a lot of ground to cover with the stock currently exchanging hands at around $42 per share. But it remains interesting for the investors primarily for two reasons. First, it still boasts a price to earnings ratio of 25. As per the experts, its P/E ratio is quite reasonable and hints at good value even after some recovery in per-share price in recent months.

Secondly, despite the novel challenges, Exxon’s struggles did not reflect on dividend hunters. The oil major was speculated to be pushed into cutting its dividend yield or even eliminating it, to cushion the economic blow from COVID-19. Showing resilience, Exxon’s forward annual dividend yield still currently stands at 8% that suggests steady income for shareholders.

Out of a total of 27 analysts that cover Exxon, 1 currently has a ‘buy’ rating on its stock. 21 of these analysts have a ‘hold’ rating, and the remaining 5 have a ‘sell’ rating. Their average price target for twelve months is at $52.13 per share that translates into a 26.19% of potential upside. The high and low price targets, on the other hand, are at $83 per share and $34 per share, respectively.

Exxon published its Q2 earnings report in July
The impact of the Coronavirus pandemic and low oil prices was evident in Exxon’s earnings report that it published last month. The oil firm concluded its fiscal second quarter with $1.1 billion of loss.

On a per-share basis, its loss came in at around 70 cents on $32.50 billion of revenue in Q2. According to Refinitiv, analysts had anticipated the company to see a lower 61 cents of loss per share and a higher $38 billion of revenue in the recent quarter.

In related news, Storebrand ASA said on Monday that it had offloaded its stake in ExxonMobil Corp. that it valued at $12.3 million. The move was attributed to the Norwegian life insurer’s push for a stringent climate policy that required it to divest from fossil fuel producers.

Exxon is participating in the global Oil and Gas Initiative but has not offered any insight into specific targets for minimising emissions so far.

Earlier this month, the U.S. oil major also partnered with Waze to introduce contactless fuel payments.