Exxon Mobil (XOM) reported its second-quarter earnings results that easily surpassed analyst expectations thanks to unprecedented production in the Permian Basin and Guyana. 

The $9.2 billion in earnings worked out to $2.14 per share for Exxon, a 17% improvement year over year. This was well ahead of the $2.02 analysts were expecting. 

The performance in Q2 shows that the company is gaining a wider lead over competitors like Chevron, which reported disappointing results in its own quarterly earnings update recently. Chevron’s profits fell 27% and came in shy of the analyst consensus.

The two companies aren’t just competing for market sentiment through earnings, though. They’re in a heated dispute over a stake in Guyana’s generational oil find, which is currently held by Hess.

Just last year Chevron offered the company a $53 billion buyout, and Exxon feels they have the right to match the offer. Hess has a 30% stake in an Exxon-led consortium.

Exxon, as is Chevron for that matter, is seeing a stabilization in the oil market after the Russian invasion of Ukraine led to an energy crisis, which greatly benefited the two companies. Their earnings became inflated, and they’re now coming back down to earth. At one point, both companies were among the most profitable in all of America.

The long-term prosperity of these companies remains uncertain as the world becomes more committed to prioritizing climate health. In the meantime, though, XOM has gained 15% this year. 

While the stock didn’t move much on today’s earnings update, you might be wondering if this is a good time to buy. You’re in luck – we’ve taken a look through the VectorVest stocks software and found 3 things to help you make your next move with confidence and clarity.

XOM Has Fair Upside Potential, Safety, and Timing, But It's Not Time to Buy Yet

VectorVest helps you save time and stress while winning more trades by delivering clear, actionable insights in just 3 simple ratings. These are relative value (RV), relative safety (RS), and relative timing (RT). 

Each sits on a scale of 0.00-2.00 to 1.00, making interpretation quick and easy. You’re even given a buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. As for XOM, here’s what you need to know:

  • Fair Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year price projection), AAA corporate bond rates, and risk. This makes it a far superior indicator to the typical comparison of price to value alone. XOM currently has a fair RV rating of 0.86, albeit a ways below the average. The stock is overvalued with a current value of just $99.51/share.
  • Fair Safety: The RS rating is a risk indicator computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 0.95 is fair for XOM. 
  • Fair Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. The RT rating of 1.01 is also fair for XOM.

The overall VST rating of 0.95 is fair for XOM, but the stock is still rated a HOLD in the VectorVest system. We encourage you to take a closer look if you’re currently invested in this stock or looking for an opportunity to trade it. Transform your trading strategy for the better with a free stock analysis at VectorVest today!

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VectorVest advocates buying safe, undervalued stocks, rising in price. XOM delivered impressive Q2 results featuring an easy profit beat fueled by record production. The stock itself has fair upside potential, safety, and timing.

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