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Dr. Steven Bauer

Dr. Steven Bauer

In 2001, I retired and now permanently reside in Mexico. After 5 years of managing my own affairs, I resumed my career in 2007 as…

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Meaningful Pullback Forecast for Exxon Mobil

Meaningful Pullback Forecast for Exxon Mobil

The Company – Exxon Mobil Corporation (XOM)

Exxon Mobil Corporation (XOM) is one of the world's largest companies, with a market capitalization of over $400 billion, annual revenue of over $475 billion, and a net income of over $40 billion. That’s BIG and these statistics are at the top.  XOM is a vertically integrated oil and gas company with global operations. It all began in 1882 and remains an excellent company paying a decent dividend. 

It is my opinion that, Exxon's recent J/V with Rosneft is another positive for investors, longer-term. The company's recent development projects will help generate more revenue. It also has a J/V with the Saudi Basic Industries Corporation that will further enhance its capacity to meet on going energy needs. Another major area of production is the U.S. Gulf Coast and continued additions of rigs in the Bakken field and from the Kizomba project in Angola. 

Forecasts

Accurate Forecasts (plus) Patience waiting for Conformations (equals) Results   (Profits).  This simple formula F + C = R is how I go about making money for myself and my Clients.  The below Valuation of my raw data plus many comparative calculations has been very reliable and profitable for many years.  It requires long hours of hard work and experience to know when to “tweak” the data. 

ExxonMobil Forecasts

You might consider reading my article on “My Methodology.”  (Click on My Methodology)

Professor’s – Current Valuation for Exxon Mobil Corporation  (XOM)
Current Price:  $91.00
Target (Projected Price) :  (Plus)  5% or more / (Minus) 20% or more from the Current Price.
Trailing P/E:  9.6
Forward P/E  (fye 12 month):  11.2
PEG Ratio:  1.28  -  (Good)
Price to Sales:  1.28  -  (Good)
Price to Book:  2.58  -  (Not so Good)
Dividend:  2.50%
R.O.I. – Return on Investment:  19.2  -  (Good)
Valuation Divergence:  (Minus)  18% or more from the Current Price.

Comments on My Valuation for (XOM):  

These are not strong “Fundamental – Valuations” of the Data and not a positive Target - Price Projection. The Valuation Divergence is currently negative. Longer-term Projected Earnings Growth for XOM indicates that it will be cycling from modestly positive to negative through 2015.  Projected Five year average Earnings Growth is a modest 2.0% to 3.7%.  Not Impressive!

My “Technicals” are currently graded as, "very good" – however while price appreciation has been strong for XOM my (internal) Indicators are clearly deteriorating. 
My Consensus Opinions are also graded quite high, but Analysts tend to be way to optimistic.

At this time, Buying XOM is definitely not recommended. 

Please see my Report Card (below) on XOM and a couple other peer Companies.
Source of Raw Data: Finviz and Others

Notes for the above Valuation Titles:  Target (Projected) Price – and – Valuation Divergence is calculated and produces a probable range of the future price of the Company over the coming one to six months. Fundamental Valuations and Technical Analysis Calculations are computed and translated by formula into a Rating for each Company. This procedure is similar for the below Report Cards. I often suggest Cash at times like this and patience as an alternative for Holding.  Taking Bearish Positions are never recommended Publicly and are reserved for qualified and pro-active Investors – ONLY!  Contact me for further guidance before making an investment decision on XOM.

Professor’s - Report Cards for Exxon Mobile and Selected Peers
XOM:  82  /  B-
CVX:  76  /  C
BP:  79  /  C+
OXY:  73  /  C
EC:  71 / C-

Grades below 90 / A are not current (never are) Candidates for Buying.

Further support for the above notes can be read in my article on "My Rotation Model."  (Click on My Rotation Model)

Charts

Two Year Chart for XOM and above mentioned Peers

2 Year Comparative XOM

It is clear that there are three groupings of Companies in this 2-Year graphic.  I can tell you “Why” each of these groups is where it is based on my archive of Fundamental Valuations for each Company. 

Twenty Year Chart for XOM with S&P (SPY) as a Reference

Twenty Year Chart for XOM

I suggest that you take a long look at this 20-year chart. Having a longer-term perspective of a possible future investment will always give you a more consistent bottom line. For a larger view click on XOM.

Market Status

The general market is currently Fundamentally overvalued and Technically overbought, and its Consensus Opinion is much too bullish, Insiders are Selling and Interest Rates / Dividends are rising. This does not make for “Wise” investing.  This means that you must consider holding Cash or perhaps taking bearish positions in the coming time-frame.  (Bearish positions are for Pro-Active Investors Only!)

My analytic focus and logo is “Investing Wisely,” e.g. taking advantage of the bull / bear cycles as they occur within the overall marketplace. Integrating conservative fundamental analytics within these technical cycles means maintaining a process of the thorough and on-going analytics of many companies, sectors and industry groups.

Professor's Opinion of Exxon Mobil Corporation

Despite XOM being a very strong company over all of these many months, I am now Forecasting that both XOM and selected peers will be under moderate to severe pressure in the coming weeks and perhaps longer.

This is an Initial Warning about buying or holding Exxon Mobil.

Conclusion

I am currently bearish on Exxon Mobil, the economy and the general market. It is important for you to understand that holding Cash during questionable time frames is a prudent and wise choice. (This is definitely a "questionable" time frame)!

Smile, Have Fun – “Investing Wisely,”

By. Dr. Steve




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  • Brad on October 22 2012 said:
    Good analysis - thanks Steven.

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