8) Exxon Mobil Corporation (NYSE:XOM)
Average Upside Potential: 12.70%
Forward P/E Ratio (As of September 25): 12.41x
Exxon Mobil Corporation (NYSE:XOM) operates as an oil and natural gas production company. It offers exploration and production of integrated fuels, lubricants, chemicals, and refined products for the automotive, trucking, and shipping industries to reduce GHG emissions.
Wall Street analysts believe that Exxon Mobil Corporation (NYSE:XOM) continues to enjoy a wide economic moat, stemming from its strategic assets. The company’s wide economic moat is further strengthened by its scale, integration, and technological capabilities. Its acquisition of Pioneer exceeded expectations, and the integration has been advancing smoothly.
Moving forward, Exxon Mobil Corporation (NYSE:XOM) continues to focus on growth through innovative technologies like hydrogen, biofuels, and carbon capture and storage, with significant investments expected to diversify its earnings and enhance shareholder value. Also, the development of Proxxima, which is a high-performance thermoset resin, and carbon materials for numerous applications is underway. Exxon Mobil Corporation (NYSE:XOM) has been focusing on producing more barrels at a lower cost and in a more environmentally friendly manner. This should help the broader US economy and energy security.
Market experts believe that the partnership with Pioneer Natural Resources in the Permian Basin should continue to yield benefits associated with logistics, procurement expertise, and water infrastructure. Additionally, the company has been making significant progress in divesting non-core assets and plans to continue to assess its portfolio for competitive advantage and divestment opportunities.
Analysts at Mizuho lifted their price target on the shares of Exxon Mobil Corporation (NYSE:XOM) from $128.00 to $130.00, giving a “Neutral” rating on 16th September 2024. Insider Monkey’s 2Q 2024 data revealed that the company was in the portfolios of 92 hedge funds.
Madison Investments, an investment advisor, released its first-quarter 2024 investor letter. Here is what the fund said:
“This quarter we are highlighting Exxon Mobil Corporation (NYSE:XOM) as a relative yield example in the Energy sector. XOM is a leading integrated oil and natural gas company. It has upstream assets that develop and produce oil and natural gas, along with downstream refining and chemical manufacturing assets. We believe it has attractive low-cost acreage in the Permian basin and has a sizeable growth opportunity in Guyana. Further, we think XOM has a sustainable competitive advantage due to size and scale, and its ability to integrate refining and chemical assets provides a low-cost advantage versus competitors.
Our thesis on XOM is that it will grow production volumes of oil and gas moderately over the next few years, while limiting excessive capital investment that plagued the industry from 2014-2020. Production growth will come from its 2023 acquisition of Pioneer Natural Resources, which is the largest producer in the Permian basin. XOM plans to double its Permian output by 2027, to 2 million barrels per day. Capital spending will be limited to $20-25 billion per year through 2027, which should allow for significant amounts of cash to be returned to shareholders including a $35 billion share repurchase program and continued dividend increases. Higher oil prices would provide a tailwind to our thesis but are not necessary. We think XOM can grow earnings and cash flow if oil prices remain above $60 per barrel…” (Click here to read the full text)
