By Senad Karaahmetovic
Piper Sandler analyst Ryan Todd upgraded shares of Exxon Mobil (NYSE:XOM) to Overweight for Neutral with a $109 per share price target, up from the prior $102.
The analyst raised his rating on XOM shares to “reflect the significant transformation underway at the company, increasingly advantageous asset portfolio, attractive portfolio mix (overweight refining and strong exposure to international gas with bullish 18+ month outlooks for both), and attractive relative valuation (trades at a slight discount to CVX, while premium vs. Europeans has narrowed).”
Overall, Todd is bullish on Energy stocks amid an “attractive” setup heading into the Q2 earnings season.
“With the refiners down ~30%-40% from last month's peak, and IOCs down ~20%, the market has been following the traditional "recession" playbook. Not only do we view the "supply constrained" nature of this cycle as likely to persist, but we view the valuations of the group as increasingly attractive,” Todd added in a client note.
Exxon is seen as the largest beneficiary of likely “robust 2Q refining results”.
“We are constructive XOM into the quarter, driven by robust downstream performance and greater Chems resilience than expected,” Todd concluded.
Exxon stock is up 0.6% in pre-open today.