Other stocks here

XOM, a 71% higher target price
Current, target price 54, 93 (+73%)

September 12th, 2021
1 minute read

Sales recovery continues

• Sales increased another 18% in the second quarter to 67,742 million dollars which is far above our forecast 58,128 million dollars.
• Average quarterly growth is 21% & sales are up 108% from last year.
• We predict average growth of 3% which brings sales up to 76,782 million dollars in the second quarter of 2022.

Margins at new highs

• The cash cost ratio was flat at -86% & profit increased from 2,796 to 4,781 million dollars with lower non cash costs too.
• Average quarter costs are still in recovery at -90%.
• We use the latest -86% costs which gives a 6,080 million dollars profit in the second quarter of 2022.

Data file & model

Cashflow following too

• Cashflow was slightly higher at 6,934 million dollars with slightly higher investment spending of -2,716 million dollars in the second quarter.
• Average quarterly cashflow has now jumped to 4,922 million dollars which is higher than early 2019 levels,
• We use the same -2,716 million dollars investment which with higher sales gives a much higher 8,222 million dollars cashflow in the second quarter of 2022.

Balance sheet, higher leverage

• Cash was down slightly from 3,515 to 3,465 million dollars in the second quarter.
• Liabilities increased from 169,669 to 171,733 million dollars so net cash worsened from -166,154 to -168,268 million dollars.
• With our forecast higher cashflow & an -2,113 million dollars equity payout, net cash will be -140,309 million dollars in Qw months time.

Valuation, a 71% higher target price

• XOM capital from the last six years increased to 67,046 million dollars in the second quarter & is forecast to reach 97,118 million dollars in 12 months time.
• At the current value 228,500 million dollars, based on forecasts, it’s at 0.70X assets with a 1% yield.
• Our cashflow forecast is 30,072 million dollars which is an 8X valuation. At 13X the target price is 71% higher at 92.