Exxon Mobil Corp (NYSE: XOM) down 15% from its year-to-date high is a fantastic opportunity to hope onto a stock that’s ripe for a rebound, says Ryan Todd. He’s a Senior Research Analyst at Piper Sandler.
Exxon stock has upside to $109 a share
On Tuesday, Todd upgraded the oil giant to “overweight” and raised his price target to $109 a share that translates to a 25% upside from here. In a note to clients, the analyst said:
Upgrade reflects significant transformation, 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.
He expects NYSE-listed firm to report solid results for its fiscal second quarter on July 29th that will serve as a near-term catalyst for the stock. Exxon stock is trading at a PE multiple of 14.63 at the time of writing.
Why else does he like Exxon stock
Earlier this month, the American multinational said its current quarter profit from “refining” could see a sequential increase of up to $5.50 billion. Todd also likes the Exxon on “resilience” in the chemicals segment.
He’s convinced the “energy trade” is so not dead and is bullish on the space at large. The analyst wrote:
With refiners down 30% to 40% and IOCs down 20%, market has been following the traditional recession playbook. Not only do we view supply constrained nature of this cycle as likely to persist, but valuations of the group as increasingly attractive as well.
The Energy Select Sector SPDR Fund has tanked over 20% in less than two months.
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