Exxon Stock: Short-Term Profit Growth Expected, Long-Term Dividend May Rise (NYSE:XOM)

Exxon appears to be one of the rare US-based stocks with a long-term return and long-term dividend growth.

Solid fundamental growth short term with expected rising dividend performance

Forward guidance for Exxon’s peak oil production could decline as a move toward green energy takes hold after a year from now. One can see the declining revenue and net profit, but no one can deny that Exxon could be a valuable dividend play beyond late 2024. The dividend yield is expected to climb at that time.

YEARLY ESTIMATES	2022	2023	2024	2025	2026
Revenue	450,277	424,578	344,982	311,357	285,776
Dividend	3.58	3.71	3.82	4.11	–
Dividend Yield (in %)	3.59 %	3.72 %	3.82 %	4.12 %	–
EPS	12.95	11.05	9.07	7.61	6.55
P/E Ratio	7.71	9.03	11.01	13.12	15.24
EBIT	79,552	66,315	47,025	37,126	36,496
EBITDA	103,315	89,147	71,015	60,852	61,133
Net Profit	54,077	44,000	34,758	28,501	24,725
Net Profit Adjusted	54,512	44,196	34,711	30,216	24,725
Pre-Tax Profit	77,858	66,267	46,247	37,248	36,107
Net Profit (Adjusted)	73,825	60,393	45,972	–	–
Gross Income	197,319	165,035	145,204	–	–
Shareholder’s Equity	194,838	207,507	219,619	217,284	207,115
Total Assets	375,388	387,984	400,621	390,455	375,445

Click to enlarge

Source: Business Insider

The latest catalyst to drive American independent energy production

With the recent news of OPEC raising their prices with Saudi Arabia cutting production, this is a predictable price move for oil over the long run. Also, some American politicians question why their country does not explore domestic energy. This will also enhance the country’s security while being less dependent on foreign oil.

From the stock price of XOM, you can see various standard simple moving average periods of 20, 50, and 200; it is strong compared to the overall standard benchmarks of large USA significant major indices.

RSI of 57 is still reasonably valued with some room to still grow.

Profit is not solid but positive, considering the current price of oil. If oil goes up, you can imagine the impact rising oil prices will have on this stock as people look for short-term solid returns on any stock with potential growth.

	Values
SMA20	5.42%
SMA50	4.51%
SMA200	13.72%
RSI (14)	57.06
Profit Margin	11.10%

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Source: FINVIZ

Technical Analysis Shows Immense Short-Term Strength

Fibonacci

As this technical indicator shows, the price of XOM is getting overvalued at the top end. Based on the current momentum and need for a return, many investors may continue to pile into this stock over the next few months. Few companies can generate this excitement with the fear of missing out.

Bollinger Bands

As the price does hit the upper bound of this indicator, I would expect the XOM stock price to drop temporarily to enable the Bollinger Band to reflect the strong momentum of this stock.

What do Monte Carlo Simulations suggest?

Data prediction shows a strong probability of higher prices moving into early next year. Also, the probability distribution of data prediction shows increased price into the range of well past $100 as pricing momentum continues.

Based on the regression forecasting, it is suspected that XOM’s share price could be stable over the next 14 days but will continue to rise over the next month.

Risk is low for long-term returns.

Price vs. Short Volume

The remainder of the year shows relatively low shorting volume compared to all trading volume. Considering the downward pressure in global markets, it seems XOM is an outstanding stock to hold as it retains value in price.

Source: StockGrid

Insider Activity

Judging from specific insider activity stats, one can see prominent positions are being taken, which shows confidence in the stock at that time.

Date	Shares Traded	Shares Held	Price	Type	Option	Insider	Trade
2022-08-03	108,467.00	285,467.00	87.08	Buy	No	Goff Gregory James	108467.0
2022-08-03	169,214.00	454,681.00	88.36	Buy	No	Braly Angela F	169214.0
2022-08-03	682,319.00	1,137,000.00	88.77	Buy	No	INCLUSIVE CAPITAL PARTNERS, L.P.	682319.0
2022-08-04	35,439.00	1,172,439.00	86.86	Buy	No	Avery Susan K	35439.0
2022-08-04	4,561.00	1,177,000.00	87.82	Buy	No	Fox Leonard M.	4561.0

Click to enlarge

Source: Business Insider

Price Target vs. Actual Stock Price

As you can see, the price has been nearly reached with the share price of XOM. The gap between other weaker stocks has been much broader, reflecting how XOM outperforms most companies, including competition.

Source: Business Insider

Conclusion

Compared to other energy stocks, Exxon has some growth ahead as political calls for domestic oil production increase. Also, we approach a crucial midterm election in a few weeks. If Republicans take control of Congress, it might strengthen XOM’s share as this party typically supports domestic energy independence. This will help Exxon’s stock price over the next few months into early 2023. All forecasting charts appear to confirm this, resulting in the high conviction of a continued buy call early next year. Based on the fundamentals, it also carries a positive story with a long-term dividend growth story in the coming years.