Exxon Mobil (XOM) Stock Falls Along With Crude Prices
NEW YORK (TheStreet) -- Shares of Exxon Mobil (XOM) - Get Report are down by 1.23% to $78.43 in mid-morning trading on Friday, as falling crude prices take their toll on the oil sector today.
Crude prices are declining after the International Energy Agencysaid that there are a record 3 billion barrels of crude and oil products stockpiled worldwide.
A stubborn global supply glut is responsible for crude prices more than halving over the past year and a half as OPEC has responded to increased U.S. production by maintaining its own production levels.
In today's report, the IEA said that the oversupply could continue into next year.
"The current forecast is for a mild winter in Europe and the U.S. If it turns out to be true, bulging stock levels will add further pressure and oil market bears may choose not to hibernate," the IEA said, according to Reuters.
Industry standard Brent crude for December delivery is down by 0.36% to $43.90 per barrel while West Texas crude for December delivery is down by 2.32% to $40.78.
Separately, TheStreet Ratings team rates EXXON MOBIL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate EXXON MOBIL CORP (XOM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- XOM's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
- XOM, with its decline in revenue, slightly underperformed the industry average of 37.2%. Since the same quarter one year prior, revenues fell by 37.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of EXXON MOBIL CORP has not done very well: it is down 10.80% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EXXON MOBIL CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: XOM
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.