Shares of Exxon Mobil Corp.
XOM,
climbed 1.5% toward an 8-year high in afternoon trading Friday, boosted by rising oil and gas prices and an upbeat analyst comment. Crude oil futures
CL00,
rose 1.4% in afternoon trading while natural gas futures
NG00,
advanced 0.5%. Analyst Phil Gresh at J.P. Morgan reiterated the overweight rating he’s had on the oil and gas giant since January 2021, and kept his stock price target at $108, saying the company’s “re-rating story still has legs.” Gresh said he believes the stock still has room for increased investor interest following the “de-rating” that took place in the 2020 downturn, in which the stock suffered a record yearly decline of 40.9%, given concerns over a heavy debt burden. “With the company now fully shifted towards a mantra of capital discipline and the balance sheet back to a strong position, [Exxon Mobil] is in much better shape to return more capital back to shareholders, while still pursing attractive growth opportunities at key assets,” Gresh wrote in a note to clients. He believes investors have given the company only partial credit for this change, particularly when compared with peer Chevron Corp.
CVX,
which Gresh has rated underweight since early-March 2022. Exxon Mobil’s stock, which is headed for the highest close since September 2014, has run up 61.9% year to date, while Chevron shares have hiked up 51.6% and the S&P 500
SPX,
has dropped 13.5%.
Read More: Exxon Mobil stock rises toward 8-year high after analyst says bullish ‘re-rating’ story