Exxon Mobil Corporation (NYSE: XOM) shares have advanced more than 50% since the beginning of 2021 year, and the current share price stands around $63. Stock markets are advancing at the beginning of the week, the global business activity is recovering, and OPEC expects a stronger oil demand recovery in the upcoming quarters.
Fundamental analysis: Bank of America reported that Exxon Mobil has the capacity for dividend growth
Exxon Mobil shares are advancing last several months, and the technical picture implies that the price could advance even more this July. The global business activity is recovering; increasing vaccinations together with government spending will drive higher growth and keep the market stable.
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Oil price remains supported even as the U.S. dollar continues to appreciate following the Federal Reserve hawkish tone; still, the future performance of oil prices is likely to depend on OPEC decisions. Bank of America recently reported that Exxon Mobil is poised for a relative recovery after several years of lagging performance and that it has the capacity for dividend growth.
Exxon Mobil reported first-quarter results in the last week of April; total revenue has increased by 5.3% Y/Y to $59.15 billion while GAAP EPS for the same period was $0.64 (beats by $0.07). It is important to mention that capital expenditures were $3.1 billion in the first quarter, which is $4 billion lower than the first quarter of 2020.
“The strong first-quarter results reflect the benefits of higher commodity prices and our focus on structural cost reductions while prioritizing investments in assets with a low cost of supply. The company’s long-term capital allocation priorities remain investing in advantaged projects to drive cash flow, strengthening the balance sheet, and maintaining a reliable dividend,†said Darren Woods, chairman, and chief executive officer.
Exxon Mobil’s 5.5% dividend looks safe, while CEO Darren Woods said that even with $50/bbl, Exxon could pay dividends. The company’s management remains very optimistic about the upcoming quarters in terms of growth which is certainly positive for shareholders.
Exxon Mobil trades at less than fifteen times TTM EBITDA, and with a market capitalization of $266 billion, shares of this company are fairly valued.
Technical analysis: The positive trend remains intact
Exxon Mobil shares have advanced more than 50% since the beginning of the 2021 year, and according to technical analysis, there is no risk of a positive trend reversal for now. Rising above $65 supports the continuation of the bullish trend, and the next price target could be located around $70.
On the other side, if the price falls below $60, it would be a “sell†signal, and we have the open way to $55.
Summary
Exxon Mobil shares are advancing last several months, the global business activity is recovering, and Bank of America reported that Exxon Mobil has the capacity for dividend growth. Exxon Mobil’s 5.5% dividend looks safe, and the company’s management remains very optimistic about the upcoming quarters in terms of growth.
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