NEW YORK (TheStreet) -- Shares of Exxon Mobil (XOM) are declining, lower by 1.85% to $92.08 in midday trading Monday, as oil is trading at a five-year low after analysts at Morgan Stanley lowered their 2015 forecast for Brent crude this morning, CNBC reports.
The firm cited oversupply, saying crude prices could fall to $53 per barrel in 2015. Its base case scenario is for $70, lower than its previous estimate of $98.
Crude has declined by about 40% percent since June as Brent futures continue to fall, down 4.13% to $66.22 today -- its lowest level since October 2009.
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Oil prices plunged last week after European Central Bank president Mario Draghi said the bank would leave its rates unchanged, Business Insider reported.
Also, the Organization of the Petroleum Exporting Countries decided to keep its output ceiling instead of cutting production to boost prices, Bloomberg reported.
OPEC's decision means that oil will remain oversupplied through the beginning of 2015, and prices could remain low for longer than expected, the Wall Street Journal reported.
Irving, TX-based ExxonMobil is scheduled to present its 2015 Outlook for Energy: A View to 2040 tomorrow from 1 p.m. to 2 p.m. eastern. The Outlook for Energy, updated every year, is the company's long-term global view of energy demand and supply.
Separately, TheStreet Ratings team rates EXXON MOBIL CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate EXXON MOBIL CORP (XOM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EXXON MOBIL CORP has improved earnings per share by 5.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EXXON MOBIL CORP reported lower earnings of $7.37 versus $9.70 in the prior year. This year, the market expects an improvement in earnings ($7.63 versus $7.37).
- The net income growth from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 2.5% when compared to the same quarter one year prior, going from $7,870.00 million to $8,070.00 million.
- XOM's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that XOM's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: XOM Ratings Report