Exxon Mobil shares close lower on Monday, oil major plans greenhouse gas emission reduction by 2025

Exxon Mobil Corp (XOM) announced on Monday plans to reduce its greenhouse gas emissions over a five-year period in an attempt to contribute to the objectives of the Paris Agreement.

Exxon Mobil shares closed lower for a second consecutive trading session in New York on Monday. It has also been the steepest single-session loss since November 30th. The stock went down 3.61% ($1.58) to $42.22, after touching an intraday low at $42.19, or a price level not seen since December 8th ($40.51).

Shares of Exxon Mobil Corporation have retreated 39.50% so far in 2020 compared with a 12.90% gain for the benchmark index, S&P 500 (SPX).

In 2019, Exxon Mobil Corp’s stock went up 2.33%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.

The oil major intends to reduce the intensity of operated upstream greenhouse gas emissions by 15% to 20% by 2025, compared to levels registered in 2016.

The overall reduction would be supported by a decrease of 40% to 50% in methane intensity and a drop of 35% to 45% in flaring intensity across the company’s international operations, Exxon said.

Pressure on leading oil and gas companies from investors and climate activists has mounted in regard to meeting the 2015 Paris climate objective of restraining global warming to below 2 degrees Celsius from pre-industrial levels.

Analyst stock price forecast and recommendation

According to CNN Money, the 21 analysts, offering 12-month forecasts regarding Exxon Mobil’s stock price, have a median target of $45.00, with a high estimate of $74.00 and a low estimate of $36.00. The median estimate represents a 6.58% upside compared to the closing price of $42.22 on December 14th.

The same media also reported that at least 18 out of 26 surveyed investment analysts had rated Exxon Mobil’s stock as “Hold”, while 5 – as “Buy”. On the other hand, 3 analysts had recommended selling the stock.