On Friday, Exxon Mobil Corporation fell drastically. After missing fourth-quarter 2019 EPS expectations by $0.04, it sold off to a nine-year low. During the last years, the company continued downfall, though it tried to attract investors with the promise of a 5.60% forward dividend yields. Including this month, the Dow Jones component missed estimates six times in the past nine quarters.
Over the years, the energy giant’s revenues fell 6.6% to $67.17 billion. In the third quarter of 2019, the stock declined by a full 15%. To build cash flows during the most extended period in United States history, it tried to apply for a restrictive program. Analysts expect in the first quarter of 2020 that the revenue will decrease again, due to the coronavirus outbreak.
During the mid-decade bull market, Exxon Mobil experienced a strong rally. Nevertheless, it stopped in the mid-$80 in 2007. The stock tried unsuccessfully to break out several times until 2007 when it hit an all-time high at $104.76. Afterward, it has been gradually falling.
Last week, Chevron Corporation also reported a 14.2 % revenue decline. Nevertheless, it’s managed to hold above the December 2018 low. On Monday, Cowen also noted about this stock’s decent. The changing political headwinds mostly caused such kind of downfall. They have already dropped the Dow’s two energy plays to the bottom of the list of component performance. Nevertheless, they could affect these stocks’ value for many years in the future, as the political headwinds continue to grow.
Activists of the European climate try to make hedge funds to drop 100% of their holdings of traditional energy. Moreover, several Democratic candidates are willing to reduce fossil fuel use by heavily taxing the industry. Especially considering that it will likely grow through the decade, such pressure isn’t good news for these stocks. It seems that the rising seas and the impact of global warming make such radical solutions seem more readily acceptable.