Exxon Mobil shares fall for a second straight session on Wednesday, oil major to boost capital spending by up to 16% in 2020

March 7, 2019 8:13 am

According to a statement by Exxon Mobil Corporation (XOM) on Wednesday, it intends to boost capital spending by 10% to 16% in 2020.

The company now projects capital spending within the range of $63 billion to $65 billion in 2019 and 2020, as it expects to spend between $33 billion and $35 billion in 2020 alone. That compares with a median analyst forecast of nearly $27 billion.

Exxon Mobil shares closed lower for a second consecutive trading session in New York on Wednesday. It has also been the steepest daily loss since February 4th. The stock went down 1.13% ($0.91) to $79.28, after touching an intraday low at $77.85, or a price level not seen since February 22nd ($77.62).

Shares of Exxon Mobil Corporation have risen 16.26% so far in 2019 compared with a 10.56% gain for the benchmark index, S&P 500 (SPX).

In 2018, Exxon Mobil’s stock went down 18.47%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

At the same time, capital spending in Exxon Mobil’s production business is expected to be within the range of $46 billion to $48 billion in 2019 and 2020, most of which would be associated with US shale, deepwater projects in Guyana and Brazil as well as the company’s liquefied natural gas projects across the globe.

The oil major also said that it forecast annual cash flow from operations of nearly $60 billion in 2025, assuming oil prices of $60 per barrel.

“Given the success we experienced last year and the progress we’re making on our plans, we have even greater confidence in our ability to grow value for our shareholders,” Exxon’s Chief Executive Officer Darren Woods was quoted as saying by Reuters.

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Exxon Mobil’s stock price, have a median target of $82.50, with a high estimate of $105.00 and a low estimate of $72.00. The median estimate represents a 4.06% upside compared to the closing price of $79.28 on March 6th.

The same media also reported that 12 out of 25 surveyed investment analysts had rated Exxon Mobil’s stock as “Hold”, while 9 – as “Buy”. On the other hand, 3 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Exxon Mobil Corporation (XOM) are presented as follows:

Central Pivot Point – $79.40
R1 – $80.60
R2 – $81.20
R3 – $82.40
R4 – $83.60

S1 – $78.80
S2 – $77.60
S3 – $77.00
S4 – $76.40

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