Will holding Exxon (NYSE:XOM) be justified in October 2022?

XOM
 Stock
  

USD 109.81  3.40  3.00%   

The intend of this write-up is to give stakeholders our take on Exxon future value. We will summarize the reasons why it could be a game-changer for Exxon stakeholders.
Published over two months ago
View all stories for Exxon | View All Stories
Exxon Mobil Corp has a beta of 0.5712. Let's try to break down what Exxon's beta means in this case. Exxon returns are very sensitive to returns on the market. As the market goes up or down, Exxon is expected to follow. The beta indicator helps investors understand whether Exxon moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Exxon deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Exxon Mobil Corp. Regardless of method or technology, to accurately forecast the stock or bond market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Exxon

Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Exxon's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Exxon in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Exxon. Your research has to be compared to or analyzed against Exxon's peers to derive any actionable benefits. When done correctly, Exxon's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Exxon Mobil Corp.

How important is Exxon's Liquidity

Exxon financial leverage refers to using borrowed capital as a funding source to finance Exxon Mobil Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Exxon financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Exxon's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Exxon, but it might be worth checking our own buy vs. sell analysis

A Deeper look at Exxon

The small pull down in market price for the last few months may raise some interest from stakeholders as it is trading at a share price of 85.75 on 27,550,756 in trading volume. The company directors and management did not add much value to Exxon investors in August. However, diversifying your holdings with Exxon Mobil Corp or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.14. The current volatility is consistent with the ongoing market swings in August 2022 as well as with Exxon unsystematic, company-specific events.

High level of complacency for Exxon after the new price pull down

The downside variance is down to 4.66 as of today. Exxon Mobil Corp currently demonstrates below-average downside deviation. It has Information Ratio of 0.02 and Jensen Alpha of 0.03. However, we advise investors to further question Exxon Mobil Corp expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Exxon's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Exxon's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

When is the right time to buy or sell Exxon Mobil Corp? Buying stocks such as Exxon isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.
To conclude, as of the 23rd of September 2022, we see that Exxon follows the market closely. The company is overvalued with low probability of distress within the next 24 months. Our actual 90 days buy-sell recommendation on the company is Hold.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Exxon Mobil Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com