Shares of oil major Exxon Mobil (NYSE:XOM) hit a new 52-week high of $120.50 on September 27, driven by a few positive factors. First, crude oil prices hit a fresh 52-week high yesterday, pushing all oil and gas stocks higher. Further, Bank of America Securities analyst Doug Leggate raised the price target of XOM stock yesterday while revisiting the sector coverage. XOM stock closed at a historic high of $120.20, up 3.3% for the day, marking the fourth straight day of gains for energy stocks.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Oil prices have been on an upswing lately with the tightening of oil supply. The WTI crude oil futures are trading over $94.62 as of the time of writing. Remarkably, numbers from the Energy Information Administration (EIA) point to a decline of nearly 2.2 million barrels in crude inventories during the same period. If the supply tightness in the market persists, the climb could continue as well. However, the possibility of a U.S. government shutdown is keeping traders on edge.
BOFA Analyst Bumps Up XOM Price Target
Leggate raised the price target on XOM to $150 (24.8% upside) from $145 while reiterating a Buy rating. In a sector research note, the five-star analyst noted that high spot oil prices in the short term “resurrects conflicting challenges” for energy companies. Although these prices will generate higher free cash flows, the market seems to only factor in the long-term price implications in its valuations.
The analyst remains selective in the sector due to the contradictory behavior between long-term and short-term oil prices. The implied valuations, influenced by a decreasing forward curve for oil prices as opposed to the ongoing potential for OPEC+ supply disruptions that boost short-term oil prices, present a challenge for oil companies.
Is Exxon a Buy, Sell, or Hold?
On TipRanks, Exxon Mobil has a Moderate Buy consensus rating. This is based on nine Buys versus eight Hold ratings. Also, the average Exxon Mobil price target of $125.13 implies 4.1% upside potential from current levels. Meanwhile, XOM stock has gained 15.6% so far in 2023.
Moreover, investors looking for the most accurate and most profitable analyst for XOM could follow Devin McDermott of Morgan Stanley. Copying his trades on this stock and holding each position for one year could result in 89% of your transactions generating a profit, with an average return of 31.76% per trade.
