UBS Says This Energy Giant Is Set To Jump Over 20%.

UBS believes it is time to buy Exxon Mobil since it is the "leader of the pack" in terms of oil production.

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Exxon Mobil was taken over by analyst Josh Silverstein, who upgraded the stock from neutral to buy and raised his price target, estimating that the energy giant is likely to outperform its competitors in the near future.

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Integrated Oils is one of the best-positioned companies in this upcycle, Silverstein wrote to clients Tuesday, “With improved balance sheets and significantly more capital efficient asset bases, we expect the Integrated Oils to be the best performers during this time. With higher FCF and greater visibility, we expect consistent shareholder returns to be achieved.”

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As a result of a slight dip in energy prices in 2023, the shares of Exxon Mobil have advanced by 6% in the last year. In the course of this year, oil futures, both Brent crude and West Texas Intermediate U.S. crude, have declined by approximately 2% each. In any case, it follows a flurry of growth for Exxon Mobil in the last two years, which grew by 80% in 2022 and by 48% a year earlier.

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In terms of price target, the analyst raised the target from $125 to $144, which implies that the shares could rise another 23% from Tuesday's closing price. There has been a drop of nearly 1% in the stock price in Wednesday's premarket trading.

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Silverstein believes that investors will be attracted to Exxon Mobil as a result of its high free cash flow and shareholder return, in addition to its growth both upstream and downstream, which will increase its stock price. In the oil and gas industry, upstream refers to the processes involved in exploring for and producing oil and gas, whereas downstream refers to the final processes involved in delivering petroleum products to consumers.

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According to Silverstein, XOM's growth in upstream volumes will exceed 2024/25 consensus growth, paired with annual capacity additions in downstream/chemicals while sustaining capex between $20-25 billion annually.

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Furthermore, by mid-2024, the balance sheet will be in a net cash position, allowing shareholders to have greater control over their returns over the $17.5 billion annual buybacks." he said.

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