Monday, December 24, 2007

Exxon Mobil (XOM)

With $39.1 billion in net income for 2006, Exxon Mobil (XOM) is the most profitable company in the world. Currently trading around $94 a share, Exxon has been a good performer in 2007 and with consistently rising oil prices looks poised to have a great 2008. Lets take a look at the bull/bear perspective and you decide;

Gas prices will have to drop below $50 a barrel for Exxon to loose money. With uncertainty in the middle east and an increase in demand gas prices will likely continue to rise. Technology will allow Exxon to find natural resources more efficiently creating higher profit margins.

OPEC, pricing policies, political risks, government taxes, economic sanctions, and anti-trust laws all could effect Exxon's profit margin in the coming years. President Bush recently singed the 2007 Energy Bill calling for higher fuel efficiency. The growing concern of global warming and air pollution will increase the demand for alternative fuel vehicles and electric powered vehicles.

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