The Dow Dropped Exxon Mobil in August. But as oil prices rise, so will his stock.

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The day before

Dow Jones business average

fell

Exxon Mobil

in August, the stock was trading below $ 40 and investors were promising to cut its share. One analyst even suggested that he should join

Chevron

and change name. But Exxon has not disappeared. Instead, the stock has started gaining new fans.

In just the past week, three analysts have updated Exxon to Buy rankings. One update came from JP Morgan analyst Phil Gresh, who expected the stock to rise to $ 56 from around $ 48.

Gresh admits it’s not early in this call. The stock is up nearly 50% from its bottom, and recently rose for nine consecutive trading days – a streak that ended Friday on a report that the Securities and Exchange Commission was looking into a valuation Exxon on some of his holdings. But Exxon is still following other oil producers.

“As measured by the percentage of sales-side purchase ratings, Exxon still has the worst feel of the global collections and is still near the low end of its historical range,” Gresh writes. It is doubtful that the split is in jeopardy, even after Exxon loads up debt in 2020. Exxon’s decision could cut labor costs and reduce drill budgets – along with rising oil prices – meaning he can cover his share with free cash flow, something he hasn’t done in two years.

Exxon’s benefits depend on strong oil prices, he adds. If oil falls, its debt, around $ 65 billion, means it can’t just cycle the oil cycle higher than it could have been a decade ago. However, he said, “We believe that Exxon understands this issue and will try to use too much money to reduce debt if oil prices move steadily above the $ 50s balance.”

Next week

Monday 1/18

Stock and fixed income markets are closed according to Martin Luther King Jr. Day.

Tuesday 1/19

Bank of America,

Charles Schwab,

Goldman Sachs Group,

Halliburton,

JB Hunt Transportation Services,

Netflix,

State Street,

and Zions Bancorp reporting earnings.

Williams

Cos. Hosting a meaningful environmental, social and corporate governance event. The company’s CEO, Alan Armstrong, will speak with senior leadership on the company’s forward-looking strategy for sustainable operations.

Wednesday 1/20

Joe Biden will be inducted as the 46th U.S. president at noon in Washington, DC

New York Mellon Bank,

Citizens Finance Agency,

Find out financial services,

Fastenal,

Morgan Stanley,

Procter & Gamble,

Bancorp na SA,

United Airlines Holdings,

and UnitedHealth Group reporting quarterly results.

The National Society of Home Builders Releases NAHB /

Wells Fargo

Housing market index for January. Consensus estimate for reading 86, matching December data.

Thursday 1/21

European Central Bank announcing its monetary policy decision. The ECB is unlikely to change the level of investment resources, currently at a low of 0.5%.

Baker Hughes,

CSX,

Fifth Third Bancorp,

Intel,

IBM,

Northern Trust,

PPG Industries,

Traveling people,

Financial Truist,

and

Pacific Pacific

naming employment.

Census Bureau reporting new residential construction data in December. Economists predict that an annual rate of 1.56 million households will change each quarter, slightly more than the November figure. Building permits can be seen coming in at 1.6 million, just below the previous month ‘s data.

The

Bank of Japan

announcing its monetary policy decision. The central bank is expected to keep its short-term key rate unchanged at 0.1% negative. It is five years since Japan began to push negative interest rates for destructive spinning.

Friday 1/22

Huntington Bancshares,

South Kansas City,

Departmental Finance,

and

Schlumberger

hold conference calls to discuss quarterly results.

IHS Markit

releases both Manufacturing Purchasing Managers and Services indexes for January. Consensus estimates for the manufacturing PMI are 56.5, and the Services PMI is expected to be at 53.6. Both readings are slightly lower than the December data.

The National Society of Realtors report on home sales for December. Economists are forecasting an annual rate of 6.4 million homes sold each quarter, less than November’s 6.7 million. In November, the median house price was already $ 310,800, up 14.6% year-over-year.

Write to Avi Salzman at [email protected]