Exxon Mobil Predicts Earnings and Cash Flows to Double by 2027

Exxon Mobil Corp. (XOM) shares jumped almost 1.8% during the pre-market trading session on December 2, after American oil and natural gas laid out its long-term corporate plans. Against 2019, XOM projects earnings and cash flow projections to double by 2027.

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Furthermore, the company also plans to reduce emissions by increasing investments to $15 billion in gas emission-reduction projects over the next six years.

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Capital Expenditure Plans

ExxonMobil intends to make disciplined capital investments to be between $20 billion and $25 billion per year through 2027. The company stated that the planned capital expenditure will have the flexibility to adjust to adverse market conditions, or any other policy changes for low-emissions projects.

The company’s strategy will continue to target structural cost savings, investment in low-cost-of-supply, lower-emission products, and further portfolio high-grading.

Emission-Reduction Plans

ExxonMobil revealed that it is on track to meet its 2025 greenhouse gas emission-reduction plans, four years ahead of schedule by year-end 2021. This is driven by accelerated investments in high-return advantaged projects, from existing operations as well as the Low Carbon Solutions business.

Furthermore, ExxonMobil has laid out more aggressive plans for Scope 1 and Scope 2 greenhouse gas emission-reduction through 2030, consistent with Paris Agreement pathways.

Similarly, the company reiterated its plans to achieve the goals of the World Bank for zero routine flaring by 2030.

Management Weighs In

ExxonMobil CEO, Darren Woods, commented, “The restored strength of our balance sheet and improved financial outlook support accelerating investment in our industry-advantaged, high-return projects, and a growing list of financially accretive lower-emission business opportunities.”

He further added, “Our strategy is designed to create shareholder value by leveraging our competitive advantages while maintaining flexibility to respond to future policy changes and technology advances associated with the energy transition.”

Wall Street’s Take

Following the news, Jefferies analyst Giacomo Romeo reiterated a Hold rating on the stock with the price target of $59 (1.3% downside potential)

Overall, the stock has a Hold consensus rating based on 3 Buys, 4 Holds, and 2 Sells. The average Exxon Mobil price target of $70.23 implies 17.46% upside potential to current levels.