ExxonMobil stock remains TD Cowen’s top pick with $128 price target

Investing.com - TD Cowen has reiterated its Buy rating on ExxonMobil (NYSE:XOM) with a price target of $128.00, maintaining the oil giant as its "Top Pick" among energy stocks. Currently trading at $115.03, the stock sits within analysts’ target range of $95-$145, with InvestingPro analysis suggesting the stock is slightly undervalued.

The firm cited ExxonMobil’s strong project backlog, deep resource base, and differentiated potential growth platform extending into the 2030s as key factors supporting the rating. TD Cowen also highlighted the company’s limited downside risk to distributions given its balance sheet position. This assessment aligns with InvestingPro data showing ExxonMobil’s 42-year streak of dividend increases and moderate debt levels, with a current dividend yield of 3.38%.

The investment bank expects ExxonMobil to reduce its early-stage, policy-dependent and new business capital expenditures, currently at approximately $2.5 billion per year, at its Corporate Plan Update scheduled for later this year.

Despite some investor speculation about conservative estimates, TD Cowen does not anticipate any near-term changes to ExxonMobil’s Guyana production guidance or resource estimates. The firm noted that the company’s leverage to refining should provide support in the near term.

For the third quarter, TD Cowen’s earnings per share estimate sits slightly below consensus, projecting results approximately $0.1 billion under market expectations, while acknowledging that ExxonMobil has recently been discussing merger and acquisition aspirations, with investors eyeing potential deals in U.S. shale or petrochemicals.

In other recent news, ExxonMobil has approved a $6.8 billion investment in the Hammerhead project offshore Guyana, marking its seventh development on the Stabroek block. The project, expected to commence production in 2029, will utilize a floating production storage and offloading vessel capable of producing approximately 150,000 barrels of oil per day. Meanwhile, ExxonMobil anticipates the European Union to sign long-term contracts for U.S. natural gas, following the EU’s commitment to purchase $750 billion worth of American energy by 2028. Additionally, ExxonMobil is exploring the sale of its chemical plants in the UK and Belgium amid industry challenges such as U.S. tariffs and Chinese competition.

In a separate development, the Kremlin has noted that multiple international corporations, including ExxonMobil, are interested in re-establishing operations in Russia. UBS has maintained its Buy rating on ExxonMobil, with a price target of $143.00, citing a long-term demand outlook driven by developing countries. UBS analyst Josh Silverstein highlights that despite a forecasted decline in per capita energy use, overall demand is expected to grow through 2050. These developments reflect ExxonMobil’s strategic moves and market expectations in the energy sector.

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