Energy giant ExxonMobil (XOM) has received a downgrade from Truist Securities to Hold from Buy. The firm has also slashed its price target for ExxonMobil’s shares from $146 to $124, citing valuation concerns in the near term.
Yahoo Finance’s Madison Mills and Seana Smith break down the details.
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This post was written by Angel Smith
Video Transcript
Get some trending tickers here, Exxon Mobile with a downgrade by true is taking the stock from a buy to a whole rating is also trimming its price target on the stock here.
Those shares recovering a little bit here up by 5/10 of a percent earlier in the trade, they were down close to 1% in pre market trading in particular after this downgrade.
Now we are seeing a lot of positive movement in the overall oil space today as energy stocks are recovering, they were on the highs earlier this week after five straight days ending in the green.
But then we saw a little bit of a selling off their Shana.
Now we’re seeing a little bit of a recovery in the space.
Having said that just to pull out a quote from this particular note, they say while we continue to believe that Guyana World Class asset in the pioneer acquisition for Exxon was positive, they’re forecasting shares to underperform piers near term given current valuation.
So that’s interesting to me, they’re specifically calling out the piece uh and then they mentioned free cash flow yield trailing peers well into 2025 decreasing that price target to 124 from 146 there.
I mean, take a look at the performance of the stock here since the start of the year.
It is up just about 12% nearly 12%.
When you take a look, even the gains that we’ve seen over the last month is actually off just about 1.5% over the last year.
Those gains much more moderated up about 5%.
So I think there’s questions about ultimately the driver here of the business.
What exactly demand is going to look like for crude here, you mentioned Guyana, some of the points that were pointed out within that truest note and the calling here into question of the current valuation.
So it was enough at least for some analysts for truist to go to a hold on the name slash its price target here.
Again though, it it’s not having much impact on the stock here because here we are today, Exxon is still well above 100 bucks a share.
It’s up on your screen 100 and 14 buck this year.
And that trend had been to the upside here, not so much on the one month, one month chart that we have here, but then the start of the year has been on this uptrend.
So again, we will see how this all shakes out.
And of course, the question was Chevron’s also a recent deal here and some of the other M and A uh deals that have been done within this space, just how much that is going to shake up the sector and some of those future gains here uh over the next uh several quarters and several years.
So again, Exxon shares year to date silicon gains about 14%.
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