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The Zacks Analyst Blog Highlights: ExxonMobil, Valero, Chevron and Total

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For Immediate Release

Chicago, IL – October 4, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ExxonMobil Corporation (NYSE: (XOM - Free Report)  – Free Report), Valero Corporation (NYSE: (VLO - Free Report)  – Free Report), Chevron Corp. (NYSE: (CVX - Free Report)  – Free Report) and Total SA (NYSE:  – Free Report).

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Here are highlights from Tuesday’s Analyst Blog:

Russian Energy Firm Takes #1 Spot from Exxon

Per the S&P Global Platts ranking of the top financial performers of the year, U.S. oil giant ExxonMobil Corporation (NYSE: XOMFree Report) was pushed down to the ninth spot from its top position. In fact, only two domestic companies could sustain their position in the Top 10 list of the biggest financial performers.

Valero Corporation (NYSE: VLOFree Report), an independent refiner in the United States secured the #8 position, down from #3 last year. Another U.S. company that had a massive rank fall was Chevron Corp. (NYSE: CVXFree Report), down to #121 from #17 last year.

Russian energy company Gazprom dethroned ExxonMobil for #1 in the 2017 S&P Global Platts Top 250 Global Energy Company Rankings.  Last year, Gazprom had secured the #3 slot.

Platts ranks company’s financial performance based on four parameters – asset worth, revenues, profits and return on invested capital. The companies on the list also need to have assets greater than $5.5 billion.

Reasons for Gazprom #1

An energy economist explains that government support might have been a big factor that has led to the change in the rankings. The Russian government owns the majority share in Gazprom. Also, Gazprom’s #1 spot is significant of management's endeavor to combat low oil and gas prices, bans from low interest rate credit in Europe and its position as the EUs leading foreign supplier of natural gas, a market where the United States is seeking expansion opportunities.

Other Exceptions Seen in This Year’s Rankings

Per S&P Global Platts, the major changes in the rankings this year might have been due to the significant upheavals in the energy sector. This includes the volatility in the oil prices for three years in a row. Conventionally, the list of toppers includes integrated oil companies.

However, this year we witnessed utilities and pipeline companies holding the top spots. This can be explained as the oil price volatility doesn’t essentially impact utilities and pipeline companies. The revenue for regulated utilities remain relatively firm. Similarly, pipeline companies also usually enter into long-term contracts with fairly rigid pricing.

Some oil companies proved the exception by moving up as they made more investments in pipelines. One such company was French oil giant Total SA (NYSE: TOTFree Report), which climbed to #10 from #12. It returned to the top 10 after a two-year hiatus due to remarkable investments in the U.S. natural gas.

Other noteworthy jumps made by some companies include S&P German utility E.ON, which climbed to No.2 from No.114. British utility Centrica leaped to #15 from #156.  

Will the Trend Continue?

Per the analyst with Platts, the recent phenomenon is likely to be temporary. Last year, the United States removed a 40-year old ban on crude oil exports as part of its efforts to compete with some members of the Organization of Petroleum Exporting Countries (OPEC) as exporters by 2020. This might help U.S oil giants regain their previous positions.

Platts believes that Gazprom's role in the European natural gas market facilitated it to jump up to #1. About 20% of European natural gas needs are supplied by Gazprom and some European companies have invested its planned expansion of the Nord Stream pipeline through the Baltic Sea, despite some European governments combating it because of anti-trust concerns.

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