NEW YORK (TheStreet) -- Exxon Mobil (XOM) shares are down 1.26% to $87.15 in trading on Monday as falling crude prices take their toll on the oil sector today.
Over the weekend the company's "outperform" rating was reiterated by analysts at RBC Capital who also raised the company's price target slightly to $100 from $98.
Crude prices have rallied over 40% from its lows in recent weeks as the rise in global supplies have tapered over the past few months.
Analysts at Baker Hughes (BHI) recently noted that while oil rig counts continue to fall to multi year lows, the pace of the decline has slowed as prices have recovered.
Separately, today OPEC said that it does not expect oil to trade above $100 a barrel anytime within the next decade and sees oil prices hovering around the $76 per barrel range by 2025, according to the Wall Street Journal.
Industry standard Brent crude for June delivery is down 1.10%, or 72 cents, to $64.67 per barrel, while U.S. West Texas crude is down 0.61%, or 36 cents, to $59.03 per barrel in trading today.
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 poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- XOM's debt-to-equity ratio is very low at 0.19 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 0.54, 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 37.8%. Since the same quarter one year prior, revenues fell by 36.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has decreased to $7,998.00 million or 47.04% when compared to the same quarter last year. Despite a decrease in cash flow of 47.04%, EXXON MOBIL CORP is in line with the industry average cash flow growth rate of -51.31%.
- The gross profit margin for EXXON MOBIL CORP is rather low; currently it is at 18.89%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 8.34% is above that of the industry average.
- You can view the full analysis from the report here: XOM Ratings Report