Exxon Mobil Corporation’s (NYSE: XOM) appeal to restrict investigation conducted by Massachusetts and New York on the oil company has been rejected by a federal appeals court, according to Reuters.
The ongoing probe is related to the company’s false information about climate change provided to investors and the public.
Meanwhile, shares of ExxonMobil lost 5.7% to close at $77.22 on Tuesday, potentially due in part to the temporary decline in oil and gas costs.
Background
Massachusetts and New York were sued by ExxonMobil in June 2016. The case followed the receipt of subpoenas by the company demanding for documents related to climate change information and its communications with shareholders. XOM appealed after the case was dismissed in March 2018.
ExxonMobil and its lawyers did not respond.
On the other side, proceeding with the case, the spokeswoman for Healey, Chloe Gotsis, said that they expect to receive final documents from Exxon. Also, James supported the court’s rejection of ExxonMobil’s “baseless attempts to challenge state law enforcement efforts.”
Arguments
According to the 2nd U.S. Circuit Court of Appeals in Manhattan, ExxonMobil is barred from suing Massachusetts’ Attorney General Maura Healey in federal court as the same was already being pursued in Massachusetts state courts.
Also, the federal case against New York Attorney General Letitia James filed by ExxonMobil was questionable following the AG’s decision of not appealing the “state judge’s dismissal of the lawsuit against the company following a non-jury trial,” in December 2019.
On the contrary, ExxonMobil believes that the lawsuit should continue as Healey’s “viewpoint bias” has violated its constitutional free speech rights under the First Amendment, while James has the right to sue again.
Wall Street’s Take
Recently, Wells Fargo analyst Roger Read maintained a Buy rating on the stock and increased his price target to $107 from $93.
The rest of the Street is cautiously optimistic about the stock, which has a Moderate Buy consensus rating based on 10 Buys and 12 Holds. The average ExxonMobil price target of $87.68 implies 13.55% upside potential from pre market open levels on Wednesday. Shares have gained about 38% over the past year.
Smart Score
According to TipRanks’ Smart Score system, ExxonMobil maintains a 7 out of 10, which indicates that XOM is likely to perform in line with market averages.
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