Why is Exxon Mobil Corporation stock underperforming the market?

Exxon Mobil Corporation reported mixed financial results for Q4 2024, with adjusted earnings per share (EPS) of $1.67, exceeding the consensus estimate of $1.56, despite total revenues of $83.4 billion falling short of the expected $86.6 billion. The adjusted net profit for the quarter was $7.39 billion, down from $8.61 billion in the previous quarter. The company highlighted cumulative structural cost savings of $12.1 billion compared to 2019 levels, with a target of $18 billion in savings by 2030. CEO Darren Woods emphasized the strong financial performance, noting that earnings and operating cash flow were among the highest in a decade, and expressed optimism about future earnings and cash flow potential supported by unique investment opportunities. Exxon Mobil plans to expand its annual $20 billion share repurchase program through 2026 to enhance shareholder returns. However, the company faced challenges in upstream earnings due to changes in oil prices, with anticipated reductions in fourth-quarter upstream earnings by $0.9 billion to $0.5 billion. Goldman Sachs analyst Neil Mehta maintained a Neutral rating on Exxon Mobil, citing valuation concerns and expected reductions in earnings across segments. The company is actively pursuing growth opportunities and strategic investments, including a contract with ExxonMobil Guyana and significant investments in lower-emissions projects and technological advancements in the Permian Basin. Overall, Exxon Mobil's market performance reflects a balance of execution and strategic initiatives aimed at long-term growth and shareholder value, despite short-term challenges related to commodity price fluctuations and industry margins.