tiprankstipranks
Exxon Mobil Stock Is Still Attractively Priced
Stock Analysis & Ideas

Exxon Mobil Stock Is Still Attractively Priced

Exxon Mobil (XOM) is one of the leading petrochemical companies globally, and it is also the most widely traded oil company in the USA. Throughout the USA, the company has several refineries that cater to the demands of the petrochemical industry globally.

The company was incorporated in 1882 in New Jersey, and they have its headquarters in Texas, USA. The company now operates through a large network, and it also refineries outside of the USA (Canada).

I am bullish on Exxon Mobil as its price target, dividend yield, and valuation multiples imply solid total return potential, and Wall Street analysts are generally bullish on it.

Strengths

One of the foremost strengths of Exxon Mobile is its leading status in the petrochemical industry. Exxon is the largest petrochemical company in the USA, but it is also the largest in the industry it operates in. From being a regional marketer of U.S.-based kerosene, Exxon has grown to become one of the largest petrochemical companies in the world.

It has remained in the top four of the Fortune 500 for several years. Another strength of the company is its wide product offering. Its business is divided into three main categories: Chemicals, Downstream, and Upstream.

Recent Results

Upon reporting results for the third quarter for 2021, Exxon stated that it had one of the highest profits in years since demand improved, operations got streamlined, and commodity prices increased, too. On an adjusted basis, the company made $1.58 per share, and its revenue for the quarter was $73.8 billion.

According to XOM, all three of its primary business segments posted healthy earnings. The EPS of $1.58 is its highest ever since 2014. XOM also stated that its cash flow from operating activities reached $12.1 billion, and in 2022, the company plans to repurchase $10 billion of its shares.

Valuation Metrics

XOM stock looks very undervalued here as it trades at a massive discount to historical averages on both a forward EV/EBITDA ratio and forward price/normalized earnings basis. Its EV/EBITDA ratio is 5.7x compared to its historical average of 7.7x, and its forward price/normalized earnings ratio is 10.7x compared to its historical average of 12.9x. The dividend yield also looks quite attractive at 4.8% on a forward basis.

Wall Street’s Take

According to Wall Street analysts, XOM earns a Moderate Buy consensus rating based on six Buys and eight Hold ratings assigned in the past three months. Additionally, the average Exxon Mobil price target of $76.64 puts the upside potential at 5.9%.

Summary and Conclusions

Exxon Mobil is a leading global energy company with a lengthy and illustrious history of generating attractive shareholder returns and paying out a substantial and growing dividend.

At the moment, despite the share price performing well in recent months, the stock still looks attractively priced here as energy prices are soaring on rising inflation and increased demand from a re-opening global economy.

Wall Street analysts are generally bullish on the stock, and the dividend yield plus upside to the average price target implies a decent total return outlook for investors at current prices. As a result, it looks like it could be a decent time to add shares.

Download the TipRanks mobile app now

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Read full Disclaimer & Disclosure

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles