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Will 2012 Be Exxon's Encore?

With 2012 just beginning, now's a great time to gauge how the stocks you're interested in are likely to do this year and beyond. By knowing what stock analysts and fellow investors expect from a stock, you'll be smarter about whether you should buy it for your portfolio -- or sell it if you already own it.

Today, let's take a look at ExxonMobil (NYSE: XOM  ) . As I discussed last month, ExxonMobil enjoyed big gains during 2011, as the company pushed above the $100 billion mark in quarterly revenue. Yet Exxon operates in risky parts of the globe, which can create big problems for the oil giant. Can Big Oil's biggest player repeat its great performance in 2012? Below, I'll take a closer look at what people expect from ExxonMobil and its rivals.

Forecasts on ExxonMobil

Median Target Stock Price $95
2011 EPS Estimate                           $8.56
2012 EPS Estimate $8.41
Expected Annual Earnings Growth, Next 5 Years 9%
Forward P/E 10.2
CAPS Rating (out of 5) ****

Sources: Yahoo! Finance, Motley Fool CAPS.

Will ExxonMobil keep winning in 2012?
Exxon has analysts looking at both sides of the bull-bear argument. On one hand, the target price for the stock rests about 10% higher than current prices -- a reasonable return after a good year. But average earnings estimates see lower income for the oil giant, and those 2012 estimates have dropped over the past few months.

Where Exxon may become vulnerable is in exploration. According to company filings and other sources, U.S. rivals Chevron (NYSE: CVX  ) and ConocoPhillips (NYSE: COP  ) both expect to increase their capital and exploratory budgets by around 17%. Meanwhile, Exxon isn't seen increasing its budget at all. Although Exxon's planned expenditures still represent a higher dollar amount, Chevron and Conoco could close their gap with the oil giant through higher spending.

The other big question is whether the law of large numbers will put a ceiling on Exxon's growth. The company already has the biggest market cap in the market. There's no shortage of smaller players with better growth prospects. In gas, Cheniere Energy's (AMEX: LNG  ) planned liquefied natural gas exporting facility could rake in profits from U.S. gas production, helping it grow at a much faster pace than Exxon. Even among producers, Samson Oil & Gas (AMEX: SSN  ) is turning shale plays into growing profits.

But what Exxon gives you is stability. Even if oil prices plummet, Exxon isn't headed for big financial trouble. You can't say the same thing about many smaller players in the industry. As a blue-chip play in energy, Exxon delivers dividends and growth at a modest pace that's sufficient for most investors.

With its pickup of XTO Energy a few years ago, ExxonMobil made itself a bigger player in natural gas. But we've got another stock we think is an even more exciting gas play. Join the thousands who've already found out its name and more about the company in The Motley Fool's special free report on natural gas, but don't wait -- get it today.

Click here to add ExxonMobil to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Chevron. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

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Related Tickers

10/27/2016 11:01 AM
XOM $87.20 Up +0.11 +0.12%
ExxonMobil CAPS Rating: ****
COP $43.61 Up +1.81 +4.33%
ConocoPhillips CAPS Rating: ****
CVX $101.39 Up +0.20 +0.20%
Chevron CAPS Rating: ****
LNG $39.41 Up +0.09 +0.23%
Cheniere Energy CAPS Rating: ***
SSN $0.73 Down -0.01 -0.68%
Samson Oil and Gas CAPS Rating: ***