Exxon Mobil's Big Bet: $20B Annual Buybacks, Doubling Upstream Earnings By 2027 Amid Pioneer Merger Scrutiny
Portfolio Pulse from Nabaparna Bhattacharya
Exxon Mobil Corporation (XOM) projects increased oil and gas production, aiming for 4.2 million barrels per day by 2027, with a focus on growth in the Permian and Guyana. The company has improved its earnings power since 2019, adding about $10 billion to its annual earnings and cash flow. Exxon Mobil plans to grow annual earnings and cash flow by $14 billion from year-end 2023 through 2027 and achieve $6 billion in additional structural cost reductions by 2027. Upstream earnings are expected to more than double by 2027. Capital expenditures are projected to be $23-$25 billion in 2024 and $22-$27 billion annually from 2025 through 2027. The company is on track for $17.5 billion in share repurchases in 2023 and plans to increase this to $20 billion annually through 2025 after the Pioneer Natural Resources Company (PXD) merger, subject to market conditions. However, the merger is under scrutiny by U.S. antitrust enforcers. ExxonMobil is also investing in lower-emissions opportunities, with more than $20 billion planned through 2027. XOM shares saw a slight decrease in premarket trading.
December 06, 2023 | 1:55 pm
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NEGATIVE IMPACT
Pioneer Natural Resources is involved in a merger with Exxon Mobil, which is currently under antitrust investigation, potentially impacting the merger timeline and terms.
The antitrust investigation into the Pioneer merger introduces uncertainty and could delay or alter the terms of the deal, which may negatively affect Pioneer's stock in the short term.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 70
POSITIVE IMPACT
Exxon Mobil anticipates production growth, increased earnings, and significant share repurchases, with a focus on cost savings and lower-emissions investments. The company's stock saw a minor premarket dip.
The comprehensive growth strategy and share repurchase program signal a strong outlook for Exxon Mobil, which is likely to be viewed positively by investors. However, the slight premarket dip suggests a cautious short-term investor sentiment, possibly due to the antitrust scrutiny of the Pioneer merger.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90