Exxon Mobil (XOM, Financial) just threw a curveball at investors, warning that its fourth-quarter profits could miss Wall Street's estimates by nearly 20%. Despite a $400 million lift from rising gas prices, the energy giant is taking hits elsewhere, with falling liquids pricing and weak chemicals margins dragging its numbers down. Mizuho's Nitin Kumar didn't hold back, cutting his EPS estimate from $1.79 to $1.55, while UBS analysts stayed cautiously optimistic, pointing to cost cuts and stronger upstream volumes as potential lifelines. UBS is sticking with its “Buy” rating and a $147 price target, betting on Exxon to find its footing.
Investors aren't exactly thrilled—shares slipped 1.2% to nearly $107 after the announcement. The oil industry, still grappling with post-pandemic demand normalization and a glut of new global refining capacity, isn't making things any easier. Exxon's Q3 profits were already down 5% year-over-year, and Chevron (CVX, Financial) took an even bigger hit, with a 21% drop in the same period. Wolfe Research analysts chimed in, pointing out that while these struggles are widespread, Exxon's future cash flow could give it an edge in boosting dividends down the line.
So, what's next? The industry's volatile landscape leaves little room for error. Exxon's upcoming earnings call will be make-or-break, with investors eager to see if it can navigate the storm or sink further into the industry-wide slump. For now, the market's watching—and Exxon's got a lot to prove.
