Barclays on Tuesday upgraded shares of Exxon Mobil (NYSE: XOM) to overweight, saying the oil major's stock price appears to have bottomed and it now looks attractive compared with its peers and the broader market's payout to shareholders.
The bank also maintained its $94.00 price target on Exxon's stock, compared with an average target price of $85.94.
Barclays boiled down its view to Exxon's "leading near-term position" in the low commodity price environment and its potential for upside after a period of underperformance. Barclays also cited the oil giant's long-term focus on developing liquefied natural gas facilities and increased diversification into petrochemicals, which it says boosts the oil giant's valuation in a number possible future scenarios.
Barclays is aware of the fact that Exxon has lagged its peers by about 4% following surprise write downs of certain assets this year.
However, looking at the company's share price versus its net asset value — the fair market value of its assets minus liabilities — the bank found Exxon is at its cheapest relative position to its peer group since the oil price downturn began in 2014.
Shares closed at $80.16 on Monday, about a dollar above the 52-week low of $79.26 on June 2. On Tuesday, Exxon was up 43 cents, at $80.59. The shares’ 52-week high of $95.55 was achieved on July 15 last year.
