Exxon Mobil shares fall the most in a month on Friday, Cowen downgrades stock to “Market Perform”, cuts price target

Cowen downgraded on Friday Exxon Mobil Corp (XOM) from “Outperform” to “Market Perform”, as it noted that the energy company had no plans to reduce its natural gas spending any time soon, which translates to lower cash flow and restrained upside for its stock over the upcoming one year.

The firm also revised down its price target on the stock from $100 to $75.

Exxon Mobil shares closed lower for the fourth time in the past eleven trading sessions in New York on Friday. It has also been the steepest daily loss since February 4th. The stock went down 1.43% ($1.15) to $79.01, after touching an intraday low at $78.25, or a price level not seen since March 6th ($77.86).

Shares of Exxon Mobil Corporation have risen 15.87% so far in 2019 compared with a 9.42% gain for the benchmark index, S&P 500 (SPX).

In 2018, Exxon Mobil’s stock went down 18.47%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

“Exxon Mobil’s counter-cyclical investment decision may look prescient in future years, but we do not believe the investor community is willing to place that same bet today and are downgrading the stock as a result,” Cowen analyst Jason Gabelman wrote in a client note, cited by CNBC.

Last week the oil major said it now projected capital spending within the range of $63 billion to $65 billion in 2019 and 2020.

Gabelman noted that while investing in natural gas might result in more cash in the future, Exxon shareholders were likely to see slow dividend growth.

“Exxon Mobil should continue to grow its dividend, though potentially by a lower rate than the greater than 5 percent compounded annual growth rate over the past five years,” the analyst said.

Exxons “dividend yield has increased 10 of the past 12 years and averaged the highest level of the 2000s in 2018,” Gabelman also said.

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Exxon Mobil’s stock price, have a median target of $82.50, with a high estimate of $105.00 and a low estimate of $75.00. The median estimate represents a 4.42% upside compared to the closing price of $79.01 on March 8th.

The same media also reported that 12 out of 25 surveyed investment analysts had rated Exxon Mobil’s stock as “Hold”, while 9 – as “Buy”. On the other hand, 3 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Exxon Mobil Corporation (XOM) are presented as follows:

Central Pivot Point – $79.14
R1 – $80.42
R2 – $81.83
R3 – $83.11
R4 – $84.39

S1 – $77.73
S2 – $76.45
S3 – $75.04
S4 – $73.63