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Thursday, December 8, 2022

Can buying Exxon Mobil Corp. (XOM) Be Profitable?

Exxon Mobil Corp. (NYSE: XOM), a company that engages in geological deposit exploration as well as gas and oil production, was able to lower the cost of production and the break-even price of oil to a level that is slightly around $41 per barrel.

The break-even price will be down another $10 in five years. This would enable Exxon Mobil Corp. (XOM) considerably increase cash flow and ensure the payment of dividends while reducing its reliance on price volatility for this priceless resource.

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XOM benefited from the higher price of a barrel of oil in the first half of the year. The corporation was able to lower debt beginning in the first quarter of 2022 and increase the share repurchase program from $10 billion to $30 billion.

The first quarter’s cash from operations climbed by 60% year over year. Exxon Mobil Corp. (XOM) has also specified intentions to boost Permian Basin output by 25% this year in order to take advantage of high oil prices.

It is important to note that Exxon Mobil Corp. (XOM), like other oil and gas companies, is quite susceptible to changes in the price of resources. Therefore, a key step in reducing reliance on declining prices is the program to lower the cost of break-even manufacturing.

The pressure on Exxon Mobil Corp. (XOM) will be lessened even at the present break-even point of about $40, and the business will receive enough money to pay for capital projects and raise dividends on an annual basis. The corporation has earned the title of dividend aristocrat by consistently paying dividends for many years.

The price of oil has a significant impact on the value of XOM shares. Wall Street analysts have set high target prices for Exxon Mobil Corp. (XOM)’s stock because they are typically optimistic about the company’s future. Credit Suisse thus anticipates a rise in prices to $125.

XOM stock increased 1.87 percent for the week while falling -15.55 percent on a monthly basis. Its trailing twelve-month performance was 39.36 percent, while its quarterly price performance was 1.18 percent.

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