XOM Investment Analysis Report & Stock Research, Exxon Mobil Corp.

Exxon Mobil Corporation (XOM)

XOM Stock Report

2-Year Price History

View Larger XOM Chart
NYSE:XOM
$65.41
(2/9 1:06PM)
+1.6%
Open$65.11 Mkt Cap$305.5 Billion
High$65.71 52Wk High$76.54
Low$64.5 52Wk Low$61.86
Volume18.6 Million Avg Vol 10D34.8 Million

XOM Stock Evaluation

Because of a relatively quiet week from a price movement perspective, there has been little change in the valuation of XOM recently. Furthermore, there has been no change to the earnings guidance given by the company's management in the last week. Those are two key factors in our fundamental analysis which are unchanged since our last report. In accordance with these static factors, we see no catalyst for a ratings change this week.

Recommendation Summary

At Ockham Research, we believe that there is extremely useful information to be gleaned from historical evidence. When a stock is out of line with historical norms it could definitely be a signal that it is overvalued or undervalued. But as proponents of the Efficient Market Hypothesis will tell you, the market is never wrong about stock prices because everything that can be known about a stock has already been priced in. However, in extreme cases, such as the Tech bubble in the early 2000’s or more recently the credit crisis demonstrates there are certainly times where historical evidence can be misleading. Episodes such as this do prove that times of great market correction either positive or negative can be driven by factors outside of fundamentals.

Ockham Research is reaffirming our rating on XOM this week although we believe that this stock has become more intriguing based on the underlying fundamentals at this price level. Overall, the NYSE has been relatively stable over the last few months, or at least, the performance of the market has not crossed a major volatility standard deviation over the last twelve months. For a detailed analysis of this stock please read the following report.

First, XOM increased in price by 0.57% since 01/30/2010 and this does not greatly impact our outlook.

Second, since our last report, there have been no significant adjustments in earnings expectations or guidance.

XOM Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, XOM the high and low end of the Price to Sales per share ratios are 1.18x and 0.84x respectively.

Notice that XOM's current Price to Sales per share ratio is 1.07x, which is somewhat above its historical average. As such, the current Price to Sales ratio suggests a neutral share price forecast. In order for us to become more positive about XOM we would need to see a drop in the Price to Sales ratio of 6% given current sales per share levels in order to return to its historical weighted average.

XOM Cash Earnings

As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of XOM, Ockham views their current Cash Earnings as above their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for XOM, the current level of Cash Earnings compared to its historical levels helps identify where XOM is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 9.95 and a historical low Cash Earnings per share ratio of 7.10, an investor can relate where value becomes optimal.

So, again, with a current Price to Cash Earnings per share ratio of 9.30, XOM is presently above its historical range. Ockham Research is always focused upon the value that investors have placed upon a given metric in the past. In other words, how much would an investor pay for a particular level of Cash Earnings in terms of stock price, and how does that relate to today. Naturally, we utilize proprietary methods to accomplish this, but the basic premise holds true and is simple to understand. For XOM, we are a bit negative on the Cash Earnings level given its higher than historical norm.

XOM Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from XOM against the historic high and low levels over an available data range. Because XOM has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In XOM’s case, the estimated annual dividend is $1.68 producing a current dividend yield of 2.59%. The highest dividend yield from XOM in recent history was 3.11% while the lowest dividend yield was 1.44%. Therefore, the current dividend yield of XOM is above the historical median by 13.85%. This is definitely a positive in our view.

Peer Comparison

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Exxon Mobil Corp. Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including XOM) 9.05 3.42 » 13.26 1.00 0.43 » 1.67 18.16% 24.74%
*10 year range does not include current year values
Exxon Mobil Corp. XOM $305.5 Billion $64.35 9.30 4.88 » 15.09 1.07 0.54 » 1.67 14.80% 33.10%
PetroChina Co. Ltd. ADS PTR $194.6 Billion $106.30 16.54 2.55 » 20.66 2.04 0.66 » 4.18 33.74% 22.04%
BP PLC - Shs American Deposit.Receipt Repr.6 Shares BP $163.7 Billion $52.43 7.97 4.01 » 12.31 0.69 0.36 » 1.18 9.20% 24.02%
Chevron Corp. CVX $140.7 Billion $70.13 5.98 3.36 » 15.37 0.85 0.42 » 1.07 18.60% 25.74%
Total SA TOT $123.0 Billion $55.17 7.23 3.98 » 9.16 0.82 0.43 » 1.13 11.12% 28.38%
Royal Dutch Shell PLC Class A RDSA $93.0 Billion $53.85 7.52 3.20 » 8.82 0.60 0.28 » 0.78 n/a 23.52%
VALUATION RATING
Ockham's Rating
Ockham's XOM Rating: FairlyValued
CROWD SENTIMENT:
Caps Rating
The Latest Financial News
The most recent Stocks on Financial TV & Blogs from impactful financial news sources
Seeking Alpha Wall St Breakfast

Seeking Alpha Wall St Breakfast Discussed the Latest Development of Exxon Mobil Corporation

Exxon Mobil Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Seeking Alpha Wall St Breakfast.

The Motley Fool CAPS data suggests that investors believe Exxon Mobil Corporation will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on XOM. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, XOM has been less covered in the news compared to the rest of our universe of stocks.

“… EXXON feels less than jubilant. Ghana has blocked the sale of a $4B stake in its Jubilee oil field, ending months of talks with potential buyer EXXON MOBIL (XOM). …”

4:26P, Feb. 08,2010 XOM $64.35 Exxon Mobil Corp.
Closing Bell

Closing Bell: Discussion of Analysts and Exxon Mobil Corporation

When the television or blog talks about an analysts' opinion it could have a major impact on the stock.

The Motley Fool CAPS data suggests that investors believe Exxon Mobil Corporation will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on XOM. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, XOM has been less covered in the news compared to the rest of our universe of stocks.

“… EXXON-mobile was upgraded to a buy from hold over at collin stewart. $80 price target on stock because of evaluation. The analyst telling clients there's a belief investors are ... …”

4:00P, Feb. 08,2010 XOM $64.38 Exxon Mobil Corp.
Countdown to the Closing Bell

News Developing on Countdown to the Closing Bell for XOM

Exxon Mobil Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Countdown to the Closing Bell.

We noticed recently that in comparison to all other stocks we analyze in the news; XOM has received less coverage from the financial media in business television and blogs. Exxon Mobil Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… American express and bank of america, down in the trading session but home packer and EXXON MOBIL's awesome gains in the commodity market. …”

3:25P, Feb. 08,2010 XOM $64.57 Exxon Mobil Corp.
Closing Bell

RazorWire has Detected News About XOM on Closing Bell

The latest news from Closing Bell on XOM is available through Ockham's news analytics platform RazorWire.

The Ockham valuation currently has a Fairly Valued stance on XOM because it trades within the price range that we would expect given current market conditions and fundamentals. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Exxon Mobil Corporation has actually sunk a bit in comparison to the others.

“… industrials. On the some other stocks. The dow industrials, EXXON/mobil one standout on the upside. The stock was upgraded on EXXON. …”

3:01P, Feb. 08,2010 XOM $64.67 Exxon Mobil Corp.
Closing Bell

Exxon Mobil Corporation News Appeared on Closing Bell

The latest news from Closing Bell on XOM is available through Ockham's news analytics platform RazorWire.

Exxon Mobil Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; XOM has received less coverage from the financial media in business television and blogs.

“… You had some nice upgrades to a bunch of dow stocks, EXXON, disney and home depot. > > some of the strength in technology' some of the drug names. …”

10:13A, Feb. 08,2010 XOM $65.15 Exxon Mobil Corp.
Squawk On The Street

Stay Current on XOM's News on Squawk On The Street

The latest news from Squawk On The Street on XOM is available through Ockham's news analytics platform RazorWire.

Exxon Mobil Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Ranking all stocks in terms of news coverage offers some interesting data. In the case of XOM, it is getting significantly more attention in recent news coverage than we are used to seeing. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… They got a contract from EXXON to build an air separation nitrogen plant. The market likes it and likes this stock after of course the air products/airgas deal. Back to you. > ... …”

6:42P, Feb. 05,2010 XOM $64.92 Exxon Mobil Corp.
Mad Money

Exxon Mobil Corporation Talked About Near M&A Discussion on Mad Money

While we do not know the details relating to XOM and any possible deal, our RazorWire news analytics has noticed a mention of the stock near a conversation about M&A activity.

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on XOM because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Exxon Mobil Corporation has actually sunk a bit in comparison to the others.

“… And we've got one of our most profitable stocks with xto energy and the merger with EXXON and we were concerned whether to sell it before the merger and after the merger and i'll ... …”

3:29P, Feb. 05,2010 XOM $64.52 Exxon Mobil Corp.
Closing Bell

Exxon Mobil Corporation News Appeared on Closing Bell

Exxon Mobil Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Closing Bell.

We noticed recently that in comparison to all other stocks we analyze in the news; XOM has received less coverage from the financial media in business television and blogs. Exxon Mobil Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… Chevron, EXXON and others. And utilities have been in an earnings context on pace for a 7% drop. Worst revenues and performers versus expectations overall. …”

2:26P, Feb. 05,2010 XOM $64.02 Exxon Mobil Corp.
WSJ Marketbeat

WSJ Marketbeat Brings News Related to Exxon Mobil Corporation

As always, the latest news on XOM is available to Ockham clients through RazorWire, and it was mentioned recently on WSJ Marketbeat.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, XOM has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on XOM. The Motley Fool CAPS data suggests that investors believe Exxon Mobil Corporation will beat the market in the foreseeable future.

“… foreign buyers. General Electric’s 4.6 decline is weighing on the S&P and energy giants EXXON MOBIL and Chevron are also …”

6:26A, Feb. 05,2010 XOM $64.84 Exxon Mobil Corp.
Squawk Box

Earnings Discussion for Exxon Mobil Corporation on Squawk Box

The name of the game in business is profit, and we always pay attention for XOM news as it relates to earnings.

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on XOM because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Exxon Mobil Corporation has actually sunk a bit in comparison to the others.

“… Now, if you look at what we see this week with the earnings, chevron/EXXON could not make money in the fourth quarter turning $70 oil and making a profit out of it. …”

View All Exxon Mobil Corp. Stock News

Key Fundamentals

XOM - Exxon Mobil Corporation Fundamentals
Price (2/9 1:06PM) $65.41
Volume (2/9 1:06PM) 18.6 Million
Last Close Price $64.35
10 Day Average Volume 34.8 Million
13 Week Price Range $63.56 - $76.54
52 Week Price Range $61.86 - $76.54
LTM Revenue $287.7 Billion
 
Shares Outstanding (12/2008) 4.7 Billion
Market Capitalization $305.5 Billion
Shares Held By Institutions 2.4 Billion
Institutional Holders 2,129
% Shares Held By Institutions 49.80%
Earnings Per Share (EPS) $8.69
P/E Ratio 15.00
Book Value Per Share $22.60
 
Gross Margin 30.90%
Annual Dividend 1.68
Dividend Yield 2.60%
Beta 0.47
Fiscal Year Ends December

About Exxon Mobil Corp.

Exxon Mobil Corporation is considered to operate in the Basic Materials sector. They specifically operate in the Major Integrated Oil/Gas business segment contained within the Energy industry.

The Company is engaged in the exploration, production, transportation and sale of crude oil and natural gas and the manufacture, transportation and sale of petroleum products.