ExxonMobil's Q4 Earnings Coming Up: Is the Stock Worth Holding on to?

Core Viewpoint - Exxon Mobil Corporation (XOM) is expected to report a significant decline in fourth-quarter earnings for 2024, with a consensus estimate of $1.58 per share, reflecting a 36.3$87.1 billion, indicating a 3.3% increase compared to the same period last year [2] - XOM has beaten earnings estimates in three of the last four quarters, with an average surprise of 2.9% [3] Earnings Expectations - The company has an Earnings ESP of -2.38% and currently holds a Zacks Rank of 3 (Hold), suggesting a lower likelihood of beating earnings estimates this quarter [4] - Factors affecting earnings include weaker oil prices, which could reduce upstream earnings by $0.5 billion to$0.9 billion sequentially [5] Market Conditions - The average WTI spot prices for October, November, and December 2024 were $71.99,$69.95, and $70.12 per barrel, respectively, compared to$85.64, $77.69, and$71.90 per barrel in the same months last year [5] - A lower industry refining margin is expected to impact earnings from the Energy Products segment by $0.3 billion to$0.7 billion compared to the previous quarter [6] Stock Performance - XOM's stock has increased by 9.3% over the past year, outperforming the industry average rise of 7.4% [8] - The company's current trailing 12-month EV/EBITDA ratio is 6.43, which is above the industry average of 4.05, indicating potential overvaluation [9] Strategic Developments - The acquisition of Pioneer Natural Resources enhances XOM's production capabilities in the Permian Basin, known for low production costs [12] - The company is investing in alternative energy projects, such as carbon capture and lithium battery technology, which may offer growth opportunities but require significant capital [13] Investment Outlook - Given the current market conditions and long-term growth prospects, it may be advisable for investors to hold XOM stock [14]