For the past few months, ExxonMobil’s share prices have seen a decline, its credit outlook has been downgraded and it is outspending its cash flow. Even though this state of affairs may be giving some investors the jitters, Bank of America still went ahead and named the oil giant its top U.S oil major pick for 2020 while predicting that its shares could surge as much as 50 percent.
The investment bank recently acknowledged that indeed, ExxonMobil is spending beyond its means. But it stressed nonetheless that Exxon’s Permian basin production is well underway while first oil from Guyana, the firm’s crowned jewel, is confirmed for December. The bank said that it projects seven to eight years of growth as a result of this.
While Merrill Lynch remains upbeat about Exxon, the National Association of Securities Dealers Automated Quotations (Nasdaq) Inc. was quite somber in its latest assessment of Exxon’s financial health. Nasdaq Inc., which owns the second-largest stock exchange in America, recently noted that Exxon has been out of favour with investors for much of 2019. It highlighted that the oil giant’s shares have dropped 0.8 percent year-to-date as lower commodity prices have canceled out the company’s production growth, while rival Chevron has edged 7 percent higher.
Nasdaq also paid close attention to the fact that Exxon had the outlook on its top-notch debt rating lowered by Moody’s Investors Service Inc. to negative due to a “substantial” cash burn to fund growth.
