Here's Why Exxon Mobil (XOM) is an Attractive Investment Bet
Exxon Mobil Corporation XOM has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. So far this year, the stock, sporting a Zacks Rank #1 (Strong Buy), has gained 61.1%, outpacing the 33.8% improvement of the composite stocks belonging to the industry.
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What's Favoring the Stock?
The price of West Texas Intermediate crude has crossed the $95-per-barrel mark again, highlighting a substantial improvement in the past year. The positive trajectory in oil price is a boon for ExxonMobil’s upstream operations. Also, it has a pipeline of key projects in the Permian – the most prolific basin in the United States – and offshore Guyana. In the Permian, ExxonMobil has an inventory of more than 8,000 well locations, with the integrated energy major estimating a net of 10 billion oil-equivalent barrels of recoverable resource. In offshore Guyana, ExxonMobil made several discoveries which XOM estimated at more than 10 billion oil-equivalent barrels of recoverable resource.
Like upstream businesses, ExxonMobil also benefits from its strong refinery utilization. The expansion of its Beaumont Refinery is on track and will get reflected in the extension of refining capacity by 250,000 barrels per day in the first quarter of 2023.
ExxonMobil has strong support for transitioning to a lower emission future. XOM said that its recent new initiatives related to lower emissions comprised four large-scale carbon capture and storage opportunities.
Other Stocks to Consider
Other prospective players in the energy space include BP plc BP, EQT Corporation EQT and Eni SpA E. EQT Corporation and Eni carry a Zacks Rank #2 (Buy), and BP sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The positive oil price trajectory is a boon for BP’s upstream operations. The favorable oil price scenario and increasing daily oil equivalent production volumes are aiding the energy giant’s bottom line. BP stated that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered.
In the core of gas-rich Marcellus and Utica Shales, EQT Corporation has a strong foothold. Being a leading producer of natural gas, EQT is benefiting from high natural gas price. For 2022, it is likely to witness earnings growth of 316.3%.
Eni is expecting the discovery of 700 million barrels of oil equivalent (BoE) of new exploration resources this year, suggesting an improvement from the prior guidance of 600 million BoE. For 2022, Eni is likely to witness earnings growth of 165.9%.
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