Oil Prices Rise Ahead of Earnings Reports From Exon Mobil and Chevron
The final day of January marks a big day for oil producers, with Exxon Mobil Corporation (XOM) and Chevron (CVX) scheduled to report quarterly earnings on Friday, Jan. 31, before the market open. Exxon will hold a conference call for investors at 8:30 a.m. CST, and Chevron will host a call at 10:00 a.m. CST.
Crude oil prices (/CL) were little-changed from October to December, rising about 4% through the reporting period. While prices did nearly reach $80 per barrel in October, they traded mostly flat around 70 in November and December. WTI futures did manage to rebound in January alongside rising crack spreads, which may help the stocks’ performances if that trend continues.
Both Exxon and Chevron fell through fourth-quarter trading following Q3 earnings.
Analysts expect Exxon to post earnings per share (EPS) of $1.55 for the fourth quarter. That would be down from an EPS of $2.48 reported last year. Revenue is expected to cross the wires at $86.33 billion, which would be up from $84.34 billion last year, according to TradingView.
Over the last four quarters, Exxon has beaten EPS estimates in three periods, while it beat revenue expectations twice over the same period.
Among analysts, the one-year price target for Exxon averages $129.04, or an 18.5% increase from Thursday’s $108.93 stock price. Twenty analysts have issued a “strong buy” or “buy” rating for the stock, 11 have given it a “hold” rating and only one consigned it to a “sell” rating.
For Chevron, analysts see EPS coming in at $2.11, while revenue is expected to total $46.6 billion. That would be down from EPS of $3.45 and revenue of $47.18 billion a year ago.
Chevron has beaten EPS and revenue estimates in three of the last four reporting periods.
The average one-year price target for Chevron among analysts is 177.39, or a 13.24% increase from Thursday’s stock price of 156.65. Nineteen analysts have a “strong buy” or “buy” rating on the stock while 10 have a “hold rating.” There are no “sell” or “strong sell” ratings.
Exxon is trading about 1.6% higher on the month after dropping 8.8% in December, which marked the biggest monthly decline since October 2023.
The 50-day simple moving average (SMA) crossed below the longer-term 200-day SMA back in December, a bearish technical signal known as a death cross. Since then, XOM has traded below the falling 50-day SMA, although prices have recovered somewhat since the death cross generated. That said, prices need to recapture the 50-day SMA before it could stage a recovery.
The options market expects a move of +/- 2.12 points, or 2% of the current stock price. That is a much smaller expected move compared to companies in the S&P 500.
Chevron is trading in an advantaged technical structure vs. XOM, with prices holding above the 50- and 200-day SMAs. CVX is up over 8% since the start of the year, steadily outpacing XOM. A bull flag pattern has taken shape over the last two weeks of trading, indicating a potential breakout to the upside is on the cards.
The expected move for CVX per the options market calls for +/- 3.04 points, or 2% of Thursday’s 156.78 stock price. This is about the same as XOM and doesn’t offer many options for traders selling premium.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive Inc. and tastytrade Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.