Analyst Note| Allen Good, CFA |
Investors looking for Exxon to use its annual analyst day to revise its investment plans in the face of a tough macroenvironment were left disappointed. Outside a modest slowing in the Permian this year and next, the company’s long-term plans remain intact. That includes an increase in capital spending from 2019’s $31 billion to about $33 billion this year and a range of $30 billion-$35 billion through 2025. The result, depending on market conditions, could ultimately be a doubling of earnings from 2017 levels by 2025 as well as growth in free cash flow and improvement in returns. Our fair value estimate and narrow moat are unchanged.