Oil Giants to Report Earnings: Will Exxon, Chevron and Phillips 66 Impress?
Oil Giants to Report Earnings: Will Exxon, Chevron and Phillips 66 Impress?
Energy prices could remain high in the coming months as a strong economic recovery continues
- Three oil giants to report on Friday: Exxon, Chevron and Phillips 66.
- Broader support from oil prices leaves a positive outlook for energy earnings.
- Guidance amid geopolitical tensions under watch as markets remain on edge.
Earnings season is here and several of the big oil players are scheduled to report on Friday, April 26, before the market opens. ExxonMobil (XOM), Chevron (CVX) and Phillips 66 (PSX) will provide a broad snapshot of how the oil majors have performed for the January to March quarter.
Crude oil prices rose about 16% during the relative quarter and refining margins also rose, evidenced by higher crack spreads compared to November and December.
Experts expect energy prices to remain high in the coming months as a strong economic recovery continues. Tensions in the Middle East also pose a likely tailwind for prices over at least the short term. WTI prices of $82.90 per barrel align with my 2024 end-of-year forecasts, although we have much of the year left to trade.
ExxonMobil (XOM)
Exxon is expected to post earnings per share (EPS) of $2.19 on $79.7 billion in revenue. That would see EPS drop by about 29 cents from Q4, and revenue down by nearly $7 billion over the same time. At a market capitalization of $480 billion, it’s the biggest of the three oil giants reporting.
If XOM beats those estimates, the stock price would likely continue to climb and add to its already impressive +22% year-to-date rally, which beats the broader energy sector’s +13.5% gain. The average price target, according to TradingView, is $129.43. The options market shows an implied move of +/- 3.46 points for XOM by May 3.
Chevron (CVX)
Chevron boast a market cap of $301 billion, making it the second-largest U.S. listed oil company. That said, its earnings have the potential to make a big splash in the U.S. energy sector and heavily influences the Energy Select Sector SPDR (XLE) exchange-traded fund (ETF), with a 16% weight.
CVX is expected to post EPS of $2.92 and revenue of $48.4 billion for the January to March quarter. That would be down from the fourth quarter’s $3.45 EPS and $47.2 billion revenue, respectively. The average 1-year price target for the stock is $181.29, according to TradingView. That would be nearly an 11% gain from the current price of 163.67. CVX’s expected move is +- 4.56 points by May 3.
Phillips 66 (PSX)
Phillips 66 is the smallest of the three in terms of market cap at $68 billion. Still, it is a top ten holding in the XLE. Analysts expect earnings per share of $2.19 on $79.7 billion in revenue. That would be down from EPS of $2.48 and revenue of 84.4 billion in the fourth quarter.
The average price target among analysts is $129.43, with would mark about a 7% gain from the current price of $121 per share as of Wednesday. Friday’s numbers will decide if we move closer to that target, but the broader energy market, specifically crude oil prices, will be the key factor, not only for PSX but for the energy market overall. The options market shows a +/- 5.75 point expected move for the May 3 strike.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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