Exxon and Chevron: Q1 earnings forecasts

Exxon Mobil Corporation and Chevron Corporation, two integrated energy giants, are scheduled to report their Q1 2022 earnings  on Friday, April 29, 2022, before the market opens. Following the sharp increase in energy prices in the first quarter, mostly due to the Russian invasion of Ukraine, the market is expecting excellent earnings reports for both companies. Compared to the prior-year quarter, Zacks expects Exxon’s Q1 earnings to grow 48.08% to $87.59 billion from $59.15 billion, its highest earnings since 2015, and the expected return on share to increase 246.15% to $2.25 per share from $0.65 per share.

Meanwhile, the forecast for Chevron’s earnings compared to the same quarter last year is for 45.23% growth to $41.51 billion (from $32.03 billion), but down from $48.13 billion in Q4 2021. Return per share is expected to rise 282.22% at $3.44 per share, the highest in around 10 years.

The earnings report usually only has a short-term impact on the stock price. While the start of Q2 2022 with USOil prices above $100.00 per barrel was a good prospect for oil producers, the appreciation of the US Dollar due to the Fed’s accelerating rate hike in May has put major pressure on oil prices alongside the war in Ukraine, which could affect both the oil supply in the market and the economic recovery. In addition,  Covid-19, will continue to be a drag on the global economic recovery this year.

Technical Analysis

Exxon and Chevron’s share prices have moved differently ahead of the earnings call. This is in line with RBC Capital Markets upgrading Exxon and downgrading Chevron last week. As a result, Exxon’s share price is now able to hold above the 50-day MA, while Chevron’s share price has closed below the 50-day MA for the third day as the pair’s price chart begins to see a continued bearish divergence.

Exxon Mobil Corporation

Overall, #ExxonMobil prices remain optimistic ahead of the Q1 earnings report, with prices now holding above the 50-day MA and MACD remaining above the 0 line with key resistance at the former high of $91.00 and Fibo 161.8 level at $101.30. If earnings do not meet expectations, there will be first support at $75.50 and next at the 200-day MA at $68.00.

#Chevron

The #Chevron short-term outlook is negative. The price is currently below the 50-day MA (but supported by ascending triangle lower trendline) while  the MACD histogram is falling towards the 0 line. A break below trendline and the $147.00 level could retest the Fibonacci extension at 161.8 level at $143.00 and at 261.8 level. The latter confluence with the 200 day MA at the $123.50 zone, while the key resistance is at the previous high at the $175.00 zone.

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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

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