Despite posting favorable results, Exxon Mobil Corporation shares closed down more than 2% Friday
Exxon Mobil Corporation (NYSE:XOM) posted its earnings for the third quarter on Friday, October 28. The energy giant was able to beat the Street in terms of earnings as it posted an EPS of $0.63, beating the Street’s $0.60 estimate. The performance for the quarter seems to have improved. Despite posting good results, the stock was unable to outperform the market.
The stock for the Texas-based energy giant closed down 2.46% at $84.78 Friday. Analysts had expected that the stock will perform well in the market after the results were posted. However, this was not the case as the markets fell altogether. The main reason for the stock to finish in red was solely that the wider markets had fallen. Indices fell as Nasdaq closed in 0.5% lower, whereas the S&P 500 lost 0.31% for the day.
The markets started to fall on the news that the Federal Bureau of Investigation is investigating new the use of a private email server by presidential candidate Hilary Clinton. This news created uncertainty in the market.
Exxon, in its quarterly earnings announcement, had also hinted that if the low oil prices persist, then the company will “De-Book” its oil reserves. It had further specified that it will look into the value of its major assets. This came after the Securities and Exchange Commission, Financial regulator for USA had said that it had started an inquiry into the energy giant’s reporting of reserves and asset valuations.
The Street has mixed sentiments on the stock. Sell side firms such as Bank of America, Collins Stewart, and Deutsche Bank have issued a Hold rating on the stock. However, research firms such as RBC Capital and Wells Fargo have given it a Buy rating, whereas Credit Suisse Group and Morgan Stanley have issued a Sell rating on Exxon shares. The consensus 12-month price target stands at $87.06, reflecting a 2.68% potential upside over the last close.