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On Friday, TD Cowen analysts lowered their price target on ExxonMobil (NYSE:XOM) shares to $120 from the previous $125, while continuing to endorse the stock with a Buy rating. Currently trading at $100.08, near its 52-week low, InvestingPro analysis suggests the stock is undervalued. The energy giant's stock also retained its position as a Top Pick at the firm.
TD Cowen's analysis forecasts that ExxonMobil will be able to sustain its share buyback program until at least 2026, based on current market prices. With a healthy 7% free cash flow yield and strong financial health score according to InvestingPro, this outlook remains positive despite the company's chemical segment being less robust compared to its peers, which the analysts believe highlights the strength of ExxonMobil's overall asset base.
The adjustment in the price target to $120 is attributed to anticipated lower chemical earnings in the years 2025 and 2026. The firm's stance was clarified following ExxonMobil's recent earnings guidance release, which was thoroughly reviewed by the analysts.
The analysts note that ExxonMobil's stock is trading at what they consider a relatively high yield—5% for 2025 and 6% for 2026 based on free cash flow (FCF). They suggest that the higher yield may be partly due to temporary weaknesses in the downstream earnings. Despite this, the firm remains confident in the stock's performance and maintains its Top Pick status, signaling continued optimism about ExxonMobil's long-term value.
In other recent news, ExxonMobil released its first-quarter earnings considerations for 2025, providing insights into its financial performance. UBS analyst Josh Silverstein maintained a Buy rating on ExxonMobil with a price target of $146, noting that the company's earnings per share (EPS) could reach approximately $1.81, surpassing both UBS's and Wall Street's expectations. Meanwhile, Mizuho (NYSE:MFG) Securities adjusted its outlook by lowering the price target to $129 from $131, while maintaining a Neutral rating, with an EPS forecast of $1.72 for the first quarter. TD Cowen also revised its price target for ExxonMobil to $125, down from $128, but continued to affirm a Buy rating.
These adjustments reflect varied views among analysts regarding ExxonMobil's financial outlook and operational performance. Additionally, the company announced the upcoming retirement of Karen T. McKee, president of ExxonMobil Product Solutions Company, effective May 1, 2025. This leadership change comes during a period of significant focus on the energy sector. As ExxonMobil navigates these developments, investors remain attentive to the company's strategic direction and market conditions.
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