Exxon Mobil has reversed sharply from the rally that carried it into its May 27 earnings event, dropping 7.8% on the week to $149.81 and erasing a significant portion of the recovery the prior note described as having "legs."
The price action is a clean post-earnings reset. XOM closed at $162.55 heading into the print. It now trades at $149.81 — a 3.3% single-day drop on Tuesday alone. The move is broad-based rather than stock-specific. Every major peer fell in sympathy: DVN shed 9.1% on the week, APA dropped 6.6%, COP fell 6.4%, and CVX gave back 5.8%. OXY held up best with a 3.8% decline, and lost 4.7%. The whole energy complex is repricing, not just XOM.
The lending market offers no signal of tactical short conviction behind the selloff. Availability is effectively unlimited — borrow is as loose as it gets, with shares available running into the billions. Short interest is just 1.15% of the free float, up a modest 0.8% on the week. That creep higher reverses the easing trend flagged in last week's note, but the level remains low. Cost to borrow is down roughly 11% on the week to 0.41%, cheap by any measure. This isn't a short-driven flush. The sellers are longs, not short sellers adding fresh positions.
Options positioning has drifted slightly more defensive than usual. The put/call ratio is at 0.73, running above its 20-day average of 0.69. It's less than one standard deviation above the mean — not extreme, but directionally consistent with a market hedging into oil price uncertainty. The 52-week high on PCR is 0.90, leaving room for sentiment to deteriorate further if energy prices stay under pressure.
Analyst activity this week cuts against the selloff. Barclays raised its target to $182 from $163 while maintaining Overweight, and Mizuho lifted its target to $175 from $159 while holding Neutral — both actions published either on or just before the earnings date. Further back in the month, Bernstein trimmed to $182 from $195, and UBS edged higher to $174. The consensus mean price target of $169.18 implies about 13% upside from current levels, a meaningful gap that opened wider with this week's decline. The Street's bull case centres on upstream macro strength and refining resilience; the bear case flags premium valuation, downstream margin pressure, and modest buyback execution relative to peers.
Factor scores suggest the fundamental story remains intact even if the price doesn't reflect it. Forward EPS momentum ranks in the 75th percentile on a 90-day basis, and the 12-month forward EPS growth measure ranks in the 80th percentile — both pointing to a company where earnings estimates are still moving in the right direction. The ORTEX short score is low at 29.9, consistent with the loose lending conditions described above, and has barely moved over the past two weeks despite the price drop.
What to watch next is the trajectory of Brent crude and whether the earnings-day weakness proves a single-session overreaction or the start of a more sustained de-rating. The next scheduled event is July 31.
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