How Do Analysts See Exxon Mobil Corporation (NYSE:XOM) Performing Over The Next Year?

Looking at Exxon Mobil Corporation’s (NYSE:XOM) earnings update in June 2018, analysts seem cautiously optimistic, with profits predicted to increase by 1.1% next year relative to the past 5-year average growth rate of -20.0%. With trailing-twelve-month net income at current levels of US$20.95b, we should see this rise to US$21.17b in 2019. Below is a brief commentary around Exxon Mobil’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Exxon Mobil

What can we expect from Exxon Mobil in the longer term?

Over the next three years, it seems the consensus view of the 15 analysts covering XOM is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of XOM’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
NYSE:XOM Future Profit August 27th 18
NYSE:XOM Future Profit August 27th 18
From the current net income level of US$19.71b and the final forecast of US$22.02b by 2021, the annual rate of growth for XOM’s earnings is 5.9%. This leads to an EPS of $5.76 in the final year of projections relative to the current EPS of $4.63. The bottom-line growth seems to be caused by reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. However, the expansion of the current 8.3% margin is not expected to be sustained, as it begins to contract to 7.9% by the end of 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Exxon Mobil, I’ve compiled three essential factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Exxon Mobil worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Exxon Mobil is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Exxon Mobil? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.