HOUSTON—Exxon Mobil Corp. shares passed their all-time high on Friday as oil prices resumed their climb and analysts raised their long-term views of top U.S. oil producer’s cash flow and earnings outlook.
Exxon is leading a parade of record profits among oil majors this year after doubling down on oil during the pandemic, when energy prices fell to a two-decade low and European oil majors slashed spending and moved further to renewable projects.
The stock hit $106.40 on Friday before closing at $105.86, above the prior record high close of $104.59 from June 8.
The rally comes as vindication for Chief Executive Darren Woods, who as oil prices fell in 2020 decided to “lean in” to oil investments. Exxon, he said then, would not engage in a “beauty match” with its peers pursuing solar and wind.
“Managing cash flow and focusing on what they are good at is a strategy that worked,” said Brian Mulberry, a portfolio manager at researcher Zacks Investment Management.
However, Exxon’s surging profits are a flash point for U.S. President Joe Biden, who this week accused it and other oil companies of using “the windfall of profits to buy back their own stock” rather than invest more in new production that would benefit consumers.
Exxon weathered a series of setbacks and posted a historical $22.4 billion loss in 2020. The strategy paid this year as an international oil supply crunch accelerated by sanctions against Russia made oil prices hit 14-highs.
Exxon shares are up more than 70 percent to date this year, ahead of the market gains by competitors Shell PLC, BP PLC, and U.S. oil major Chevron Corp.
Oil profits allowed the company to erase the $21 billion it borrowed in 2020 to pay its bills and keep dividend distributions intact. Wall Street expects it will add $26 billion in cash this year.
Next week, Exxon could post another strong quarter on high natural gas prices, putting it on track for a record annual profit this year of $54.80 billion, according to IBES Refinitiv, more than its cumulative earnings since 2018.
