Exxon Mobil (NYSE:XOM) snapped seven straight sessions of losses on Friday after it ended 0.8% higher at $106.80.
The oil major began its downward course on July 30, ahead of its second-quarter earnings. Its shares were further pressured during the week after the company reported its results.
XOM closed -1.79% on August 1 despite the company reporting a Q2 double beat.
The company’s better-than-expected results were driven by the highest oil and gas production for any Q2 since the company was formed by the merger of Exxon and Mobil more than 25 years ago.
However, shares of the firm continued to widen their loss on August 4, closing 2.07% lower at 107.37. Between July 30 and August 7, the stock has declined by over 5%. On a YTD basis, it has dipped 0.85%, compared to the S&P500 index’s nearly 8% loss.
As per Seeking Alpha’s quant rating, the stock has a Hold rating with a score of 3.46 out of 5. XOM has been rated a D+ for valuation, while it has been graded A+ for profitability.
Seeking Alpha analysts and Wall Street analysts, on the other hand, were bullish on the stock and issued a Buy call.
Seeking Alpha analyst, The Asian Investor rated XOM as Strong Buy on the back of strong Q2 earnings and further dividend raise. The author expects the company to announce a quarterly dividend of $1.03/share in Q4.
“In my opinion, Exxon Mobil could easily re-price to a 15X P/E ratio given its solid production, earnings, and free cash flow growth. A 15X earnings multiplier calculates a fair value of $113/share, which translates to approximately 5% upside valuation potential,” the analyst said.
However, another SA analyst, Vladimir Dimitrov, assigned it a Hold rating, arguing that “XOM’s share price is unlikely to offer above-market returns in the near future.”
“Although the stock might appear to be trading at attractive levels once we account for margins, the reality is that the market is correctly pricing in the uncertainty when it comes to the company’s return on invested capital,” they added.