ExxonMobil (XOM) Needs Another Mobil - Analyst

In comments today on ExxonMobil (NYSE: XOM) Oppenheimer analyst Fadel Gheit said the company needs another Mobil to create long-term shareholder value through synergy benefits from cost savings and efficiency gains.

"We think such a move by XOM could accelerate industry consolidation and create companies that are more resilient to low and volatile oil prices," Gheit said.

The analyst did not name names.

Meanwhile, the firm maintained a Perform rating as the company maintained 2015 CAPEX guidance of $34B, but expects lower spending in 2016 and 2017 on increased capital efficiency. The company also halved its share buyback program and expects repurchases of $500M in 4Q15, flat sequentially.

"Based on the current strip, we expect XOM to generate operating cash flow of $34.8B this year and $34.3B next year, which will partially fund CAPEX of $29.7B and $29.4B and dividend of $12.1B and $12.7B, for a cash flow deficit of $7.0B and $7.9B, to be funded from divestiture proceeds and additional debt," the analyst commented.

For an analyst ratings summary and ratings history on ExxonMobil click here. For more ratings news on ExxonMobil click here.

Shares of ExxonMobil closed at $81.23 yesterday.

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