Exxon’s Q1 Performance and Market Standing
Exxon Mobil (NYSE:XOM) experienced a significant drop of nearly 3% in its stock value on Friday, following a Q1 earnings miss attributed to lower natural gas prices and weaker oil refining margins due to high maintenance costs.
Stellar YTD Performance
Despite the recent setback, Exxon’s shares are still up 17% year-to-date. This growth surpasses the rise in Brent crude prices and outperforms its competitors by a substantial margin. The company’s market value now surpasses Chevron (CVX) by over $160B.
Strategic Capital Spending
Exxon’s substantial capital expenditure since 2019 has set it apart from its competitors. With $94B invested during 2019-23, which is significantly higher than Chevron’s spending, Exxon’s strategic execution in projects like Guyana and the Permian Basin has been superior to that of Chevron.
Arbitration and Future Prospects
Arbitration proceedings between Exxon and Chevron regarding the Guyana oil project acquisition are in the early stages. Exxon, with an advantage in cash reserves and a low net debt-to-capital ratio, stands in a strong position to navigate this challenge against its competitor.
Valuation and Future Outlook
Exxon’s valuation premium over Chevron is approximately 6% based on a multiple of forward 12-month EBITDA. Analysts suggest that a favorable outcome in arbitration could further boost Exxon’s lead over Chevron in the coming period.