In a bid to expand interests in biofuels for the reduction of greenhouse gas emissions in the transportation sector, ExxonMobil (XOM) has acquired a 49.9% stake in Biojet AS. Shares of the natural gas company, ExxonMobil, gained 4.2% on Tuesday to close at $71.35.
Biojet is a biofuels company that seeks to convert forestry and wood-based construction waste into lower-emissions biofuels and biofuel components. The company plans to develop five facilities to produce biofuels and biofuel components.
As per the agreed terms, ExxonMobil will be able to purchase about three million barrels of the products per year. The deal marks the company’s efforts to develop and deploy lower-emission energy solutions.
The President of ExxonMobil Fuels and Lubricants Company, Ian Carr, said, “The agreement with Biojet AS advances ExxonMobil’s efforts to provide lower-emissions products for the transportation sector. Using our access at the Slagen terminal, we can efficiently distribute biofuels in Norway and to countries throughout northwest Europe.”
Recently, Bank of America Securities analyst Doug Leggate maintained a Buy rating on ExxonMobil and raised the price target to $100 from $95. The new price target implies 40.2% upside potential from current levels.
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 6 Buys, 7 Holds and 1 Sell. The average ExxonMobil price target of $74.86 implies 4.9% upside potential.
Decreased Hedge Fund Trading
TipRanks’ Hedge Fund Trading Activity tool shows that the confidence in ExxonMobil is currently Very Negative, as the cumulative change in holdings across all 19 hedge funds that were active in the last quarter was a decrease of 1.1 million 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.