5 Stocks to Buy Before Their Earnings Reports

3. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 83

Earnings Announcement Date: July 29 

Exxon Mobil Corporation (NYSE:XOM) is an Irving, Texas-based integrated energy company.

In an investor note released on July 19, Ryan Todd at Piper Sandler upgraded Exxon Mobil Corporation (NYSE:XOM) stock from a Neutral to an Overweight rating and increased the target price from $102 to $109. The analyst thinks that Exxon Mobil Corporation (NYSE:XOM) looks attractive ahead of the Q2 2022 results. Although higher exploration and production (E&P) costs could be negatively interpreted by investors, the improvement in refining margin is helping analysts remain bullish on Exxon Mobil Corporation (NYSE:XOM). Todd also anticipates a show of resilience from the company’s chemicals division.

Exxon Mobil Corporation (NYSE:XOM) was mentioned in the Q3 2021 investor letter of Goehring & Rozencwajg Associates. Here’s what the firm said about the company:

“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.

What should Chevron expect?

It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects.

According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”

GQG Partners increased its stake in Exxon Mobil Corporation (NYSE:XOM) by 60% at the end of Q1 2022.