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Why Morgan Stanley thinks Total is a better bet than Exxon

  • In a Total-Exxon showdown, Morgan Stanley says Total (TOT +1.4%) is starting to benefit from high investments, translating into stronger growth in operating cash flows than most other big oil companies, and enjoys a strong outlook for operating cash flow combined with plans to reduce capex after this year.
  • In contrast, Stanley says Exxon Mobil’s (XOM -0.1%) operating cash flow suffers from an upstream portfolio with relatively few startups and weak ramp-ups; with such a weak growth outlook, XOM could decide to add additional projects or go for a large acquisition, creating capex risks.
  • Meanwhile, Chevron (CVX -0.6%) is one of the firm's top picks, with higher production growth and improving returns in the next five years driving share outperformance.
Comments (2)
    , contributor
    Comments (1646) | Send Message
    Imo, Morgan Stanley made a good call on CVX.
    However, I would also add COP on the Buy and long term hold list.
    Maybe XOM should have saved their $40B spent on XTO and put it toward a COP purchase.
    10 Oct 2013, 12:57 PM Reply Like
  • Qniform
    , contributor
    Comments (2396) | Send Message
    Yeah, CVX is the pick. TOT is a problem, because France will change the rules whenever it suits them. They are in fiscal trouble long term.
    10 Oct 2013, 01:34 PM Reply Like
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