Shares of ExxonMobil (XOM +1.96%) rallied on Tuesday, up as much as 4.2% before pulling back to a 2.9% increase as of 12:35 p.m. EDT.
Exxon updated its long-term 2030 earnings and cash flow targets today, increasing them above the prior guidance and above analysts' expectations. Thus, it's no wonder to see the stock surging higher to nearly hit a 52-week high.
NYSE: XOM
Key Data Points
$25 billion in earnings growth by 2030
Today, Exxon issued a press release, informing investors it was raising its 2030 earnings and cash flow targets.
Exxon now anticipates an additional $25 billion in earnings growth by 2030, representing a 13% compound annualized earnings growth rate, as well as an additional $35 billion in cash flow growth over the same period. Moreover, Exxon expects to achieve that growth efficiently, with no extra capital employed, as it now anticipates a strong return on invested capital of 17%.
Keep in mind, Exxon is still assuming the same $65 per barrel of oil for the new projections. The projected improvements are all due to Exxon's proprietary technology, which the company claims will enable it to extract more barrels at a lower cost, with more production to come from the key Permian Basin and in Guyana oil and gas fields, which Exxon defines as competitively advantaged assets. Moreover, Exxon anticipates a doubling of cost synergies from the acquisition of Pioneer Natural Resources, which closed in late 2023. Exxon anticipates that these "advantaged" assets, including the Permian, Guyana, as well as Exxon's LNG operations, will make up 65% of total production by 2030, contributing to more efficient growth.
3.5%-yielding Exxon on pace to become a "Dividend King"
Also in the press release, management proudly noted Exxon had raised its dividend for 43 consecutive years. Given the new earnings growth outlook, it appears that streak will continue through the end of this decade. That would put Exxon on pace to hit 50 consecutive years of dividend increases shortly thereafter, placing it in a rarefied company of Dividend Kings, or companies with 50 consecutive years of dividend increases -- a feat even more rare for an energy company to achieve.
