Shares of Exxon Mobil Corp (NYSE: XOM) have gained nearly 17% over the past month but a UBS analyst says the upside will continue to unravel moving forward.
Exxon stock should be worth $144
Josh Silverstein upgraded the oil and gas behemoth this morning to “buy” and raised his price objective to $144 – a near 25% upside from here.
The analyst expects Exxon stock to outperform its peers in the midst of elevated oil prices. His research note reads:
We see the Integrated Oils as best positioned to outperform this upcycle, driven by improved balance sheets and significantly more capital efficient asset bases that generate higher free cash flow.
The energy company is scheduled to report its Q1 results later this month. Consensus is for it to earn $2.63 a share versus $2.07 per share a year ago.
Why else should you buy Exxon stock?
Silverstein is convinced that Exxon will have net cash on its balance sheet by mid-2024 that’ll help lift the rate at which it buys back stock above $17.5 billion a year. Last week, the oil giant was said to be in preliminary talks to buy Pioneer Natural Resources as Invezz reported HERE.
Continued growth in Irving-headquartered company’s upstream and downstream businesses was among other reasons cited for the constructive view.
Our positive outlook is driven by high margin upstream volume growth 2%/3% above 2024/25 consensus that are paired with annual downstream/chemicals capacity additions, while maintaining capex at $20-$25 Bn/yr.
The multinational currently pays a dividend yield of 3.13% that may also be exciting for those interested in buying Exxon stock today.
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