ExxonMobil stock maintains Buy rating at UBS ahead of Q2 earnings

Investing.com - UBS has reiterated its Buy rating and $130.00 price target on ExxonMobil (NYSE:XOM), currently trading at $111.37, ahead of its July 25 earnings report. InvestingPro analysis suggests the stock is undervalued, with analysts’ targets ranging from $95 to $142.

UBS forecasts ExxonMobil’s second-quarter 2025 adjusted earnings per share at $1.66, exceeding the Street consensus of $1.52, though lower than the $1.76 reported in the first quarter. The projected quarter-over-quarter decrease stems primarily from lower oil prices, partially offset by recovering refining margins. With an overall "GOOD" financial health rating from InvestingPro and a P/E ratio of 14.72, the company maintains strong fundamentals.

The investment firm expects adjusted upstream net income of $5.16 billion, down $1.59 billion from the previous quarter but ahead of the Street’s estimate of $4.71 billion. Total (EPA:TTEF) production volumes are forecast at 4.57 million barrels of oil equivalent per day compared to the Street’s projection of 4.56 million.

UBS attributes the earnings decline mainly to falling oil prices, with Brent crude dropping approximately $8 per barrel, creating an estimated $1.3 billion headwind to upstream earnings. Declining natural gas prices are expected to add another $160 million headwind, with Henry Hub prices down about $0.20 per million BTU and TTF prices down roughly $2.50 per million BTU.

ExxonMobil has indicated its second-quarter 2025 earnings will be negatively impacted sequentially by the absence of approximately $100 million in favorable divestment earnings impacts within the upstream segment. The company’s stability is underscored by its 42-year streak of dividend increases and generally low price volatility, according to InvestingPro, which offers 8 additional key insights about XOM’s performance.

In other recent news, ExxonMobil has been the subject of several important developments. TD Cowen raised its price target for ExxonMobil to $128 from $120, maintaining a Buy rating and highlighting the company’s technological advancements and potential synergies from the Pioneer Natural Resources (NYSE:PXD) acquisition. UBS also reaffirmed its Buy rating, keeping the price target steady at $130, following discussions with ExxonMobil’s leadership about its strategic positioning and growth potential. Evercore ISI reiterated an Outperform rating with a $120 price target, emphasizing ExxonMobil’s strong return opportunities and efficient operations. Meanwhile, Union Investment has divested from ExxonMobil, citing insufficient commitment to climate targets, reflecting a shift towards more environmentally responsible investments. Additionally, Kazakhstan’s Tengizchevroil, in which ExxonMobil holds a 25% stake, has successfully shipped its first oil to Germany via Russia’s Druzhba pipeline, marking a new export route for Kazakh oil. These recent developments underscore ExxonMobil’s strategic initiatives and the varied perspectives of analysts and investors on its future trajectory.

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