2024-05-15 19:35:28 ET
Summary
- Exxon Mobil's foray into lithium mining is a positive development, but it will not significantly alleviate the potential pain for current long-term stockholders.
- I believe the decline of fossil fuel demand and the rise of renewables will lead to declines in Exxon's revenues, even when including its growing lithium and carbon capture businesses.
- Exxon's current valuation is likely to drop lower as its finances deteriorate, and the company is fundamentally overvalued in the long term.
Introduction and Thesis
I first wrote about Exxon Mobil Corporation ( XOM ) in August 2023. Considering that my articles are written with a 5-10 year timeframe in mind, I didn't anticipate writing a new piece on the company so soon after the first article. However, material developments regarding Exxon's business that I wasn't fully aware of have prompted me to rethink Exxon's prospects.
Interestingly, this article is technically my second time revisiting a company that I have covered previously on Seeking Alpha. My first "second article" on Tesla was really a comparison of its short-term and long-term prospects and the prospects of its competitors, the Detroit Three automakers. That article was more of a restatement and a re-contextualization of my unchanged thoughts on that company; this second article on Exxon is more of a full reevaluation of the company's long-term prospects, accounting for new information on Exxon's developing operations that I was missing before....
Read the full article on Seeking Alpha
For further details see:
Exxon Mobil: Even As Lithium And CCS Grow, Shareholder Capital Still At Risk (Rating Upgrade)