The oil price outlook is good for energy companies as they are depressed and at an average long-term low for the fourth quarter and at an extreme that is likely to rise as the year progresses. This means that energy company earnings forecasts are likely too low and that a productivity/upgrade cycle is about to unfold. Based on consensus energy sector earnings forecasts, the recovery in sentiment and share prices could be strong.
The early January consensus figure of 3.5% is down 650 basis points from the mid-2024 peak, leaving the energy sector NEW SIRKA: XLE the weakest for earnings growth in 2025 and the weakest sector in the S&P 500.
Oil price forecast for 2025 is too low
The latest forecasts put WTI oil prices at an average of around $70 this year and as low as $69. The latest price action in WTI has pushed the spot price higher, confirming the price floor that has been in place since 2021. This low end ranges from $69 to $72; To reach this level, oil prices would have to move lower, and this is less likely to happen.
GDP growth is strong and expected to remain strong, and there are tailwinds in the form of administrative policies and economic stimulus that will lead to better-than-expected results, all of which will support higher oil prices. In 2025, U.S. GDP is expected to remain stable at a modest 2.5%, while worldwide GDP growth will accelerate to around 3.5%, and possibly as high as 4%, led by emerging markets.
Tailwinds from Trump’s administration and economic stimulus in China will also support energy demand. At the end of 2024, China introduced numerous measures aimed at boosting economic growth, including plans to increase bond financing and raise wages for many of its workers. Bond financing will be used for long-term equipment upgrades and capital improvements, while higher wages will stimulate consumption, which is good news for oil prices.
As for Trump’s policy, the increase in demand will be offset by increased production, but in this scenario it will be enough to keep the price floor in place.
As for OPEC, the cartel is unlikely to increase production in 2025 and is likely to maintain production limits to benefit from higher prices. It is also set for a modernization cycle after cutting its 2025 demand forecast late last year.
Exxon Mobil Corporation is a leading diversified energy company
Exxon Mobil stock forecast for today
$128.74
Growth potential 19.67%Moderate purchase
Based on ratings from 19 analysts
| High forecast | $147.00 |
|---|---|
| Average forecast | $128.74 |
| Low forecast | $105.00 |
Exxon Mobil stock forecast details
Exxon Mobil New York Stock Exchange: gold is a leading player among diversified energy companies and the largest integrated energy company outside of China; It’s also about trading high-yield stocks at a deep discount to the S&P 500. NYSEARCA: SPY. In 2025, this is projected to result in lower revenues but higher margins, which is critical to the return on equity outlook. Not only is Exxon’s revenue forecast likely too low, putting it on track to outperform in 2025, but its high ROE is safe.
Exxon shares yield more than 3.6%, and the share price is approaching $105. The payout is less than 50% of projected 2025 earnings, growing at a low single-digit CAGR each year and compounded by share repurchases. The share count rose at the end of the third quarter of 2024 due to the acquisition of all Pioneer shares, but has fallen each quarter and buyback activity has increased. Buybacks in the third quarter topped $13.8 billion, up 5.7% year-over-year and are expected to remain strong into calendar year 2025.
Exxon shares are rising despite lack of momentum in 2023 and 2024. The upward trend is marked by falling prices in mid-2022, early 2024 and early 2025, indicating growing support among long-term investors. This support is reflected in analyst sentiment data, which shows moderate confidence in a Moderate Buy rating and $128.74 price target.
The consensus reported by MarketBeat has moved down slightly over the past few months, but most December 2024 targets range from $120 to $140, offering investors upside potential of 12% to 30%. The move to $120 matches recent highs and gives this market the opportunity to reach new highs.
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