The stock market has taken a nosedive this week, with the S&P 500 (SPX) experiencing its worst day in nearly two years and the Nasdaq Composite dropping into correction territory. A lot of this is due to disappointing earnings from big tech names. However, two corporate giants have managed to swim against the current: ExxonMobil (XOM) and Meta Platforms (META). These industry titans have shown remarkable resilience, posting results that have exceeded even the most optimistic analyst expectations.
ExxonMobil reported second-quarter earnings of $9.2 billion, or $2.14 per share, while Meta delivered earnings of $5.16 per share on revenue of $39.07 billion, marking an impressive 22% increase from the previous year.
Personally, I’m bullish on both ExxonMobil and Meta Platforms. With their strong financial performances, strategic initiatives, and investments in new technologies, I firmly believe that these stocks have the potential to drive significant returns for investors.
Let’s take a closer look at what makes these stocks so compelling.
ExxonMobil (NYSE:XOM)
ExxonMobil, one of the world’s largest publicly traded energy companies, has once again proven its mettle with a stellar performance in the second quarter of 2024. The company reported earnings of $9.2 billion, or $2.14 per share, a staggering $1 billion higher than the same period last year
One of the things that really stood out to me was the record production levels the company achieved in its Permian and Guyana assets. These are low-cost, high-yield operations, and ExxonMobil managed to increase its upstream net production by a whopping 15%, or 574,000 oil-equivalent barrels per day, compared to the first quarter.
That brought its total production to an impressive 4.4 million oil-equivalent barrels per day. And a big chunk of that growth comes from its savvy acquisition of Pioneer Natural Resources, which the company managed to close five months ahead of schedule. That deal alone added $0.5 billion to its earnings in just two months.
But ExxonMobil isn’t just about pumping more oil. It’s playing the long game, diversifying into areas like carbon capture and storage. XOM just inked a deal that puts it at the forefront of this field, with contracts to capture 5.5 million metric tons of CO2 per year—more than any other company has announced.
Investors seem to be loving these results. ExxonMobil’s stock has been on a tear, gaining around 18% year-to-date in 2024.
That’s better than its competitors, such as Chevron (CVX), which has fallen 2.5%, and Shell (SHEL), which is up 13%.
Now, some people might look at ExxonMobil’s forward P/E ratio of 13.15, which is higher than the sector median of 11.07, and think the stock is overvalued. But I see it differently. I think the market recognizes ExxonMobil’s growth potential and operational efficiency, and they’re willing to pay a premium for that.
With plans to repurchase over $19 billion worth of shares in 2024 and a third-quarter dividend of $0.95 per share, ExxonMobil is committed to delivering value to its shareholders. Plus, with $28 billion earmarked for capital expenditures this year, the company is clearly gearing up for more growth.
Is ExxonMobil Stock a Buy, According to Analysts?
According to the latest analyst ratings, ExxonMobil stock has a consensus rating of Moderate Buy. Out of 16 analysts covering the stock, 11 rate it a Buy, and five rate it a Hold. The average XOM stock price target of $137.13 implies upside potential of around 18.5% from the current price of $116.88.
Meta Platforms (NASDAQ:META)
Meta Platforms has staged a remarkable comeback, silencing skeptics and rewarding patient investors with its stellar second-quarter 2024 performance. The company reported earnings of $5.16 per share on a robust revenue figure of $39.1 billion, significantly surpassing Wall Street’s expectations. The market loved what it saw, and Meta’s stock shot up 5% after the earnings report came out.
When you compare Meta to other tech companies, it really stands out. While Alphabet’s (GOOGL) YouTube and Pinterest (PINS) were struggling with weak ad revenues, Meta was thriving. This just goes to show how strong Meta’s competitive advantage is, thanks to its enormous user base across Facebook, Instagram, WhatsApp, and Messenger. In fact, they collectively saw a 7% jump in daily active users, hitting an astonishing 3.27 billion.
What’s really impressive about Meta’s comeback is how it’s overcome multiple obstacles. Remember a couple of years ago when it was facing challenges from Apple’s iOS privacy changes and increased competition from TikTok? Well, Meta has successfully adapted its advertising strategy since then.
The company’s AI-driven ad targeting and measurement tools have proven highly effective, boosting ad impressions and average prices by 10% year-over-year. However, Meta’s growth is not limited to the advertising business. Investments in AI and the metaverse are positioning the company at the forefront of next-gen digital experiences.
Sure, the Metaverse project, Reality Labs, is still operating at a loss ($4.5 billion in Q2), but Meta is in it for the long haul. It seems like the market is starting to buy into this vision, especially after the positive reception of Meta’s latest VR headset last year and the growing community of developers and creators in the Metaverse space.
Looking ahead, Meta has an optimistic outlook for Q3 2024, with revenue projections ranging from $38.5 billion to $41 billion. This positive forecast is backed by continuous improvements in AI-driven recommendations and advertising experiences, which Meta’s CEO Mark Zuckerberg highlighted during the earnings call.
Plus, Meta plans to invest heavily in its computing infrastructure and AI initiatives, with capital expenditures expected to be between $37 billion and $40 billion for the full year.
Is Meta Platforms Stock a Buy, According to Analysts?
According to the latest analyst ratings, Meta Platforms stock has a Strong Buy consensus rating. Out of 28 analysts covering the stock, 24 rate it a Buy, two a Hold, and two a Sell. The average META stock price target of $549.35 implies upside potential of 12.4%.
Conclusion
I’m confident that both ExxonMobil and Meta Platforms are must-have stocks for any investor looking to capitalize on strong, future-focused companies. With their impressive earnings, strategic initiatives, and investments in future technologies, these stocks are well-positioned for long-term growth and success.
