🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

ExxonMobil stock target raised $15 by Piper Sandler, keeps overweight

EditorAhmed Abdulazez Abdulkadir
Published 04/18/2024, 10:26 AM
© Reuters.

On Thursday, Piper Sandler showed continued favor for ExxonMobil (NYSE:NYSE:XOM), increasing the stock's price target to $145.00 from $130.00, while maintaining an Overweight rating. The firm has consistently preferred ExxonMobil over Chevron (NYSE:CVX) for several years.

The current arbitration case involving the two companies has led to a belief that the uncertainty makes Chevron a less attractive option for new investments until the resolution becomes clear.

According to Piper Sandler, if ExxonMobil emerges successfully from the arbitration, it could create a significant valuation gap between ExxonMobil and Chevron, potentially reflected in a 3.0%-4.0% spread in free cash flow (FCF) yield. The market is currently pricing in a high chance of ExxonMobil's victory, as evidenced by Chevron trading at approximately a 3.0% discount to ExxonMobil based on the 2025 estimated FCF yield.

The firm anticipates that ExxonMobil's near-term outperformance may be limited, but acknowledges that Chevron could narrow the gap substantially if the HES deal is finalized.

Moreover, Piper Sandler sees potential upside to the Street's estimates for ExxonMobil, suggesting a 5% increase over consensus, driven by strong production trends and refining tailwinds, despite some headwinds related to timing effects. There are also growing expectations that the Pioneer Natural Resources (NYSE:PXD) deal could be finalized before the end of the second quarter.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.