Exxon Girds for Lower-for-Longer Oil Prices

Lower oil prices took a toll on

The sharp reduction marks a departure in strategy for Exxon, which prides itself on being able and willing to invest throughout the cycle. However, while the company is bullish on prices and demand in the long term, it has openly stated its view that prices are likely to remain low for an extended period, which is reflected in the decision to reduce capital expenditures. We look forward to the analyst day, where Exxon should provide greater detail on its strategy, given the collapse in oil prices, including longer-term spending plans and efforts to reduce costs. We plan to update our model with the latest guidance, but do not expect a material change in our fair value estimate or moat rating.

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