Exxon Mobil Corporation (NYSE:XOM) appears to be stepping up ambitions in its low carbon solutions business, but investors are expected to remain cautious until disclosure improves for its new business stream, according to RBC Capital Markets analysts.
In an update to clients, they also noted that execution continues in the company’s core business, which should ultimately drive improving earnings and cash flow.
Exxon’s capital expenditure (capex) increases appear to have caught some investors by surprise, but the analysts wrote that spending into 2024 looks more modest than they anticipated.
While analysts at RBC modestly upgraded their earnings estimates to better reflect Exxon's liquefied natural gas (LNG) portfolio, they also expect the company's low carbon capex to be more back-end loaded in its medium-term plan.
They maintain their ‘Sector Perform’ rating and $120 price target on Exxon stock.
Shares of Exxon Mobil slipped 0.8% to $98.39 in late-afternoon trading on Thursday.
Contact Sean at sean@proactiveinvestors.com