The outlook for oil prices is good for energy companies as they are depressed, averaging a long-term low in the fourth quarter and at an extreme level that is likely to rise as the year progresses. This means that earnings expectations for energy companies are likely very low and an outperformance/upgrade cycle is about to unfold. Based on consensus energy sector earnings figures, the recovery in sentiment and stock prices could be strong.
The 3.5% consensus reached in early January is down 650 basis points from the peak in mid-2024, leaving the energy sector… NYSEARCA:XLE The weakest in terms of 2025 earnings growth and the most downward sector in the S&P 500.
Oil price forecasts in 2025 are very low
The latest forecast calls for the WTI price to average at $70 and as low as $69 for the year. The recent price action in WTI has moved the spot price higher, confirming the minimum price in place since 2021. This minimum is in the range of $69 to $72; Oil prices would have to move lower to reach this level, and the chances of that happening are slim.
GDP growth is strong and expected to remain strong, and there are tailwinds in the form of administrative policy and economic stimulus that should lead to better-than-expected results, all of which are supportive for oil prices. US GDP is expected to remain steady at Moderate 2.5% In 2025, while globally, GDP will accelerate to approximately 3.5% and perhaps as high as 4%, led by emerging markets.
The tailwinds from Trump’s administration policy and China’s economic stimulus will also support energy demand. China has adopted several policies aimed at stimulating growth in late 2024, including plans to increase bond financing and raise wages for many of its workers. The bond financing will be used for long-term equipment upgrades and capital improvements, while wage increases will boost consumption, which is good news for oil prices.
Regarding Trump’s policies, the increased demand will be offset by increased production, but it will be sufficient in this scenario to maintain the minimum price.
Regarding OPEC, the organization is unlikely to increase its production in 2025, and is likely to keep production restrictions in place to take advantage of higher prices. It is also poised for an upgrade cycle after cutting its 2025 demand forecast at the end of last year.
ExxonMobil Corporation is a leading diversified energy company
Exxon Mobil stock forecast today
$128.74
19.67% upModerate purchase
Based on 19 analyst reviews
| High expectations | $147.00 |
|---|---|
| Average expectations | $128.74 |
| Low expectations | $105.00 |
Exxon Mobil stock forecast details
Exxon Mobil New York Stock Exchange: Gold It is the leading player among diversified energy companies and the largest integrated energy company outside China; It is also a high-yield stock trade at a significant discount to the S&P 500 NYSEARCA: SPY. This is expected to result in lower revenues in 2025 but margin expansion, which is critical to capital return expectations. Not only are Exxon’s revenue forecasts likely to be too low to outperform in 2025, but its strong capital return is safe.
Exxon stock is yielding more than 3.6%, with share prices approaching $105. The payout represents less than 50% of 2025 earnings expectations, growing annually at a low-single-digit CAGR and exacerbated by share buybacks. The number of shares increased at the end of the third quarter of 2024 due to the all-stock acquisition of Pioneer but decreases each quarter, and buyback activity is increasing. Q3 repurchases were $13.8 billion, up 5.7% from a year ago, and are expected to remain strong into calendar 2025.
Exxon stock is headed higher despite a lack of momentum in 2023 and 2024. The uptrend is characterized by price declines in mid-2022, early 2024 and early 2025, showing increasing support among long-term investors. This support is echoed in analyst sentiment data, which shows moderate conviction with a Moderate Buy rating and a price target of $128.74.
The consensus reported by MarketBeat has fallen marginally over the past few months, but most of the targets released in December 2024 range from $120 to $140, offering 12% to 30% upside for investors. A move to the $120 level is consistent with the recent highs and puts this market in a position to make new highs.
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