Evercore ISI says Exxon Mobil still looks affordable despite its stock’s recent surge. Stephen Richardson, an analyst, upgraded Exxon Mobil to outperform the stock from being in line. Exxon Mobil’s price target was raised to $120 from $88, by Stephen Richardson, an analyst. This implies a more than 21% upside from Monday’s closing. Exxon shares have surged 61.5% in 2022, as global economies grapple with a mismatch between energy supply and demand — which has led to a sharp jump in oil prices. As a result, the S & P 500 energy sector is up more than 2022. Richardson noted that Exxon Mobil shares have a 20% discount on historical levels. In a note, Richardson stated that considering the extended energy cycle ahead as well as the strong earnings profile (rising return) at XOM and Integrated Oil peers, we believe it is worth looking into the ‘right multiple. Richardson stated that Exxon’s plan to double its earnings was a major factor for the decision to invest in the stock. The company has long-term growth potential in Guyana, Permian and Brazil, Richardson said. His words were, “We consider the earnings strategy highly probable.”[Return on equity employed]According to XOM, it will increase to 15% by 2025 and to 17% by 2027. If financial performance improves in line with XOM’s vision, there will be substantial free cash flow over the next five year and return cash to shareholders via dividends and share repurchases. — CNBC’s Michael Bloom contributed reporting
