XOM - Embedded Expectations Analysis - 2021 04 22
Exxon Mobil Corporation (XOM:USA) currently trades at a discount relative to UAFRS-based (Uniform) assets, with a 0.8x Uniform P/B. Even at these levels, the market is pricing in expectations for profitability to inflect positively, but management may be concerned about reducing expenses, executing their emission reduction plans, and their current liquidity positionSpecifically, management may lack confidence in their ability to further reduce operating expenses, execute their new emission reduction plans, and continue expanding their carbon capture initiatives. Furthermore, they may have concerns about the oil and gas pricing environment, the continued impact of the pandemic on their business operations, and their current liquidity position. Moreover, management may lack confidence in their ability to deploy new lower-emitting energy technologies, capitalize on clean energy product opportunities, and secure advantageous investments
Exxon Mobil operates or markets products in United States and other countries through its divisions and affiliated companies. The company's business involves exploration for, and production of, crude oil and natural gas and manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and other products. In United States, the company's development activities are focused on the onshore United States, in the Permian Basin of West Texas and New Mexico and the Bakken oil play in North Dakota. Gas development activities are also focused on the Marcellus Shale of Pennsylvania and West Virginia, the Utica Shale of Ohio and the Haynesville Shale of East Texas and Louisiana.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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