Lower oil prices will have a major impact on the large US oil corporation’s Q1 earnings.
dropped to 59.72, the lowest since Jan 2021, focusing attention on Chevron (NYSE:) and Exxon Mobil (NYSE:) earnings due May 2 premarket. British Petroleum cut its Buyback plan to $750 million per quarter, down from its previous $1.75 billion plan, partly due to falling oil prices.
Key Highlights
- Analysts forecast Exxon Mobil earnings will decline 15% to $1.75 per share with sales increasing 4% to $86.35 billion, according to FactSet.
- Chevron’s Q1 EPS target is $2.16, marking a 26% drop vs. a year ago, with revenue totaling $48.25 billion, down around 1% compared to Q1 2024.
- Exxon strategic projects, particularly the 10 key initiatives set to commence in 2025, are projected to contribute over $3 billion in earnings by 2026, representing a substantial boost to the company’s bottom line.
- Exxon synergies from the Pioneer Natural Resources (NYSE:) acquisition are exceeding initial expectations, which could enhance operational efficiency and cost savings.
- Lower gas prices could significantly affect Exxon Mobil’s profitability, particularly in its upstream segment, potentially reducing revenue and leading to impairment charges on gas-producing assets.
- Chevron’s focus on FCF maximization could benefit shareholders through increased dividends, share buybacks, debt reduction, and strategic investments.
Prolonged weakness in refining margins could significantly impact Chevron’s financial performance, potentially leading to reduced earnings, cash flow, and limitations on capital allocation for exploration, dividends, or share buybacks.
Exxon Mobil Technical Analysis Perspective
- Exxon Mobil has been trading inside a rectangle pattern since Dec ’22.
- Hovering between 126 to 95 range while 108/109 acting as middle line.
- A move above 108/109 tends to drive prices higher towards 125/126 robust resistance.
- A move below 108/109 bring stock down 96/95 support zone.
- XOM is trading below 108/109 barrier, hinting at a dip to 96/95 base post earnings.
- A strong break above 108/109 would pave the way for a rise to 125/126.
XOM Weekly Candlestick Chart
Chevron Technical Analysis Perspective
- CVX is retesting January ’18 & July ’14 (previous all-time high) between 135 -133.
- As long as 135 – 133 support stays intact post earnings then a gradual rise to 160 to 168 falling resistance line is on the way.
- A sustained break below 133 -131 base would trigger a sharp selloff to 115 – 110.
CVX Weekly Candlestick Chart
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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.
He is the founder of TwT Learnings, provides financial market training. Follow us on “X” formerly Twitter “@twtlearning.”
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