ExxonMobil, 'Counter-running' Amid Market Fear..."Profits of $3.9 Billion Amid Soaring International Oil Prices"

▲ ExxonMobil (Exxon Mobil Corporation, XOM), International Oil Prices/AI Generated Image

As international oil prices surged by over 5% in a single day, ExxonMobil (Exxon Mobil Corporation, XOM) rose against market weakness. Strong crude oil prices and improved chemical product margins are expected to boost second-quarter profits by billions of dollars.

According to economic media outlet Benzinga on July 8 (local time), ExxonMobil's stock price rose 2.34% in Wednesday's pre-market trading. At the same time, West Texas Intermediate (WTI) rose 5.83% to $74.55 per barrel, and Brent crude rose 5.68% to $78.37.

ExxonMobil expects strong commodity prices to significantly boost its second-quarter upstream business performance compared to the first quarter. The company estimated that the increase in liquid fuel prices alone would have an effect of $3.5 billion to $3.9 billion. The impact of natural gas price changes was expected to be between minus $200 million and plus $200 million.

The chemical business also emerged as a new profit driver. ExxonMobil expects improved margins in the chemical products segment to increase second-quarter profits by $1 billion to $1.2 billion compared to the previous quarter. On the other hand, war-related supply disruptions are expected to reduce upstream profits by $600 million to $800 million and energy product profits by $200 million to $400 million.

Wall Street views ExxonMobil's earnings announcement, expected on July 31, as the next week's catalyst. The market's earnings per share (EPS) forecast is $3.76, significantly higher than $1.64 in the same period last year. Revenue is also projected to increase to $101 billion from $81.51 billion in the same period last year.

The average Wall Street target price for ExxonMobil is $170.88, with a "buy" rating. TD Cowen maintained its "buy" rating while lowering its target price to $155, and Morgan Stanley suggested $168 with an "overweight" rating. BofA Securities upgraded its investment opinion to "buy" last month and set a target price of $154.

[Article Key Summary]

-Amid a surge of over 5% in international oil prices, ExxonMobil's stock price rose 2.34% in pre-market trading.

-Rising liquid fuel prices are expected to boost second-quarter upstream profits by $3.5 billion to $3.9 billion, and improved chemical product margins are expected to increase profits by $1 billion to $1.2 billion.

-Wall Street forecasts ExxonMobil's second-quarter EPS at $3.76 and revenue at $101 billion.

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