Here’s How Saudi Aramco’s Q1 Results Contrast with XOM, CVX

Oil giant Saudi Aramco (the Saudi Arabian Oil Company) recently reported disappointing first-quarter results due to the decline in global crude oil prices. Aramco’s Q1 net income fell 19% year-over-year to $31.9 billion. In contrast to Aramco, oil majors like Exxon Mobil (XOM) and Chevron (CVX) posted earnings growth in the most recent quarter. 

Despite poor results, Aramco will continue to expand its oil production capacity, as CEO Amin H. Nasser believes that “oil and gas will remain critical components of the global energy mix for the foreseeable future.”

Importantly, Aramco revealed plans to implement performance-linked dividends that would account for 50–70% of its annual free cash flow. The dividend will be paid on a quarterly basis, at the sole discretion of the company’s board.

Despite a drop in oil prices, companies like Exxon and Chevron were able to deliver earnings growth. Exxon delivered Q1 adjusted earnings of $2.83 a share, up from $2.07 in the last year’s quarter. An increase in volume, a better mix, and cost control measures drove its earnings.

Meanwhile, Chevron’s first-quarter adjusted earnings of $3.55 per share compared favorably with the previous year’s EPS of $3.36. The company benefitted from increased margins on refined products. 

Let’s check what the Street predicts for both Exxon and Chevron.

Is XOM a Buy or Sell?

Exxon scores a Moderate Buy consensus rating backed by 10 Buys and four Holds. The average XOM price target of $130.54 suggests 19.6% upside potential from current levels. Shares of the company have gained about 3% so far in 2023.

Is CVX a Good Stock?

Wall Street is cautiously optimistic about Chevron stock. It has a Moderate Buy consensus rating on TipRanks based on six Buy and 10 Hold recommendations. Further, the average price target of $190.25 implies 19.6% upside potential. CVX stock is down 7.7% year-to-date.

Disclosure