This article first appeared on GuruFocus.
ExxonMobil (NYSE:XOM) has cash to spare, but investors still want more. Shares fell 1.76% to $183.95 at 10:20 a.m. ET on November 2, even as UBS raised its price target to $213 from $199 and maintained a Buy rating, according to The Fly. The integrated oil and gas producer generated $9.7 billion in third-quarter free cash flow beyond what it returned to shareholdersa sizeable cushion before other cash needs.
The cash engine did the heavy lifting. ExxonMobil’s October 30 release reported $25.7 billion in operating cash flow and $19.1 billion in free cash flow. Shareholder distributions totaled $9.4 billion, split between $5.1 billion in repurchases and $4.3 billion in dividends. That means free cash flow covered those payouts roughly twice, giving management room to fund competing priorities. Planned 2027 repurchases of $20 billion signal continued commitment to shareholder returns, although sustaining that pace will depend on future cash generation.
The picture adds a reason to stay selective. GuruFocus assigns ExxonMobil a GF Score of 67/100, with financial strength and profitability standing above its weaker momentum and GF Value readings. That suggests the cash cushion alone may not be enough to drive a sustained advance. The next test is whether ExxonMobil can keep covering distributions as commodity prices, working capital and capital spending shift. One strong quarter helps; it does not settle the outlook. And the $9.7 billion left after payouts represents cash available before other uses, rather than a matching increase in the cash balance.
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
