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Exxon, Chevron Stocks Edge Up; BMO Sees 'Positives' in Earnings

BMO Capital sees 'positives' in the earnings reports of Exxon Mobil and Chevron.

Exxon Mobil  (XOM) - Get Exxon Mobil Corporation Report and Chevron  (CVX) - Get Chevron Corporation Report edged higher on Friday as a BMO Capital Markets analyst saw "positives" in the earnings results from the two energy giants.

At last check shares of Exxon Mobil, Irving, Texas, were up 0.8% to $64.81 while Chevron, San Ramon, Calif., moved up 1.1% to $114.51.

Exxon Mobil posted stronger-than-expected third-quarter earnings while unveiling plans to repurchase around $10 billion of shares over the next two years. 

"We viewed Exxon's third-quarter 2021 earnings as positive, with upside less about the quarter, which was largely in line, and more about the enhanced capital return with the company planning to repurchase up to $10 billion of shares over 12-24 months," said analyst Phillip Jungwirth said in a research note.

"Next month, Exxon's board will finalize its corporate plan that will include a 4 times increase in low-carbon investments, which will total $15 billion from 2022-2027," said Jungwirth, who has an outperform rating and a $69 price target on the shares.

Meanwhile, Chevron also posted stronger-than-expected third-quarter earnings, including its best profit in eight years, as oil and gas prices surged from last year's pandemic lows. 

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West Texas Intermediate crude prices traded between $75 and $78 a barrel over the three months ending in September, a range that was around 95% higher than the deep pandemic lows recorded over the year-earlier period.

WTI was recently down 1.3% to $81.74 a barrel.

"We view Chevron's third-quarter 2021 earnings as positive with earnings per share delivering a strong beat driven by both upstream and downstream, along with other items," the analyst said.

Chief Executive Mike Wirth said that "our free cash flow during the quarter was the best ever reported by the company."

Jungwirth, who has a $123 price target on the shares, said "we remain outperform and like Chevron's solid free cash flow profile and ability to return capital."

On Thursday, executives from Exxon Mobil, Chevron, BP  (BP) - Get BP Plc Report and Shell  (RDS.A) - Get Royal Dutch Shell Plc Sponsored ADR Class A Report testified before House Committee on Oversight and Reform.

The meeting, which grew heated at times, concerned the impact of fossils fuels on climate change.