Exxon Mobil shares slide 10% premarket as RBC downgrades to underperform
MARKETWATCH 7:55 AM ET 3/16/2020
Symbol Last Price Change XOM 38.12 0 (0%) QUOTES AS OF 06:30:00 PM ET 03/13/2020
Exxon Mobil Corp. (XOM) shares (XOM) slid 10% in premarket trade Monday, after RBC downgraded the oil major to underperform from sector perform, after a steep decline in oil prices amid a price war between major oil-producing nations and " material earnings downgrades." Exxon has the highest dividend breakeven in RBC's coverage universe and analysts are expecting all of its business to be challenged in 2020. They downgraded their stock price target to $40 from $55. RBC is now expecting Brent crude prices to average $42 a barrel in 2020 and $46 a barrel in 2021. "Our cash flow estimates for XOM are 30% lower in 2020 and 22% lower in 2021," the analysts wrote in a note to clients. RBC is expecting near=term cuts in the Permian basis, and expects spending on major LNG projects to be deferred, impacting volume forecasts for the period from 2020 to 2025. Exxon shares have fallen 52% in the last 12 months, while the Dow Jones Industrial Average , which counts Exxon as a member, has fallen 10% and the S&P 500 has fallen 4%.
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