Please ensure Javascript is enabled for purposes of website accessibility

Why ExxonMobil Stock Rallied Today

By Reuben Gregg Brewer - Updated Mar 1, 2021 at 11:19AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The energy giant has been dogged by bad press lately. Today's news seems to have shifted the dialog a little.

What happened

Shares of ExxonMobil (XOM 2.01%) rose just over 5.5% in early trading today. That's a notable move for this massive company, and it doesn't appear to have anything to do with oil prices. In some ways, what was announced today could be much bigger than that.

So what

For better or worse, Exxon is one of the world's most recognizable oil and natural gas companies. That has long put it in the crosshairs of clean-energy proponents. Making matters worse, the company has steadfastly stuck to its long-term focus on carbon fuels, even as some competitors have recently begun talking up a shift to clean energy. While Exxon does have some clean-energy initiatives, such as using algae as a replacement for oil, its efforts so far simply haven't been enough to appease the increasingly loud calls for change. 

An offshore drilling rig.

Image source: Getty Images.

That's spurred a large number of outsiders to call on the company for more action. The list includes environmental groups and politicians, but now it is also starting to fill up with investors. Some of these investors are willing to buy shares and push hard for change, including efforts to get new faces on the board. Earlier in the year Exxon added one new director, but that wasn't enough to appease its dissident investors. It has now added two more, including Jeff Ubben, a noted proponent of environmental, social, and governance (ESG) investing. Wall Street clearly liked the pick.   

Now what

Exxon is set to hold its investor day on Wednesday, so there's likely to be more news out of the oil company on clean energy in the coming days. But the addition of new board members, notably one with Ubben's ESG focus, appears to have investors believing that the company is starting to take calls for change more seriously.

Although today's gain is nice to see, most long-term investors should probably wait for the clean-energy details likely to be revealed on March 3 before making a bet on the direction Exxon is taking on the ESG front.  

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
$96.30 (2.01%) $1.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.