Exxon Mobil (XOM) Stock Spikes as Oil Prices Show Gains

Exxon Mobil (XOM) stock is increasing as oil prices were rallying on the prospects of a dent in oil supplies due to geopolitical tensions abroad.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Exxon Mobil Corp. (XOM) - Get Report stock is increasing by 3.33% to $80.70 on Monday afternoon, as oil prices were rallying on the prospects of a dent in oil supplies due to geopolitical tensions abroad. 

Crude oil (WTI) is jumping 3.24% to $42.06 per barrel and Brent crude is rising 0.9% to $44.87 per barrel, according to the CNBC.com index. 

Overnight, France carried out air strikes against the Islamic State, which could weaken supplies, Reuters reports.

However, concerns about the global oil oversupply persists, the Wall Street Journal said. 

Initially, oil futures were lower earlier today, as markets were rattled by the Paris terror attacks on Friday.

Based in Irving, TX, Exxon Mobil engages in refining and marketing crude oil and natural gas in the U.S., Canada/South America, Europe, Africa, Asia, and Australia/Oceania.

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 a generally disappointing performance in the stock itself, disappointing return on equity 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 36.8%. 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.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, EXXON MOBIL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of EXXON MOBIL CORP has not done very well: it is down 16.75% 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.
  • You can view the full analysis from the report here: XOM
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