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Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant's Year, Analyst Says

Callum Keown Barron's Take US CVX XOM BAML Bank of America Merrill Lynch Moody's Exxon Mobil Exxon Mobil Oil Giant Chevron Energy Crude Oil/Natural Gas Upstream Operations Integrated Oil/Gas Developing Economies Guyana South America Financial Performance Analysts' Comments/Recommendations Share Price Movement/Disruptions Corporate/Industrial News Content Types Factiva Filters C&E Exclusion Filter C&E Industry News Filter I/EQS I/OIL I/XFFX M/ENE N/ANL N/ARG N/CNW N/DJN N/PFM N/WER R/GY R/SM XOM Barrons.com Barrons Blogs Wires Fortune 500 CODES_REVIEWED Energy Barron's Take US author Callum Keown author|Callum Keown name Callum Keown extractedtext Callum Keown rank 1 codetype author code callum_keown nameformat surname_first author Callum Keown id Callum Keown topicid barrons_display_brand BARTAKE barrons_display_brand|BARTAKE codetype BARRONS_DISPLAY_BRAND name Barron's Take source MANUAL code BARTAKE value BARTAKE canbedisplaybrand true status modified barrons_display_subject BARUS 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Giant’s Year, Analyst Says first_publish_headline|Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says flow NWREGULAR flow|NWREGULAR codetype FLOW name Wires source MANUAL value NWREGULAR code NWREGULAR status modified flow Barrons.com flow|Barrons.com codetype FLOW name Barrons.com source MANUAL value Barrons.com code online status modified name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW source MANUAL title Product code Barrons_Blogs name Barrons Blogs value Barrons Blogs status modified headline Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says headline|Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says idx xf500 idx|xf500 codetype idx why about source FACTIVA code xf500 name Fortune 500 significance prominent onlinesignificance prominent fcode xf500 in i1 in|i1 codetype in name Energy why lineage source FACTIVA code 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nfcpin nwchain SB505814221749235839656045860562112486488241 nwchain|SB505814221749235839656045860562112486488241 re guy re|guy codetype re why about source FACTIVA subcat cntry code guy name Guyana significance prominent onlinesignificance prominent fcode guy re dvpcoz re|dvpcoz codetype re why lineage source FACTIVA subcat eco code dvpcoz name Developing Economies fcode dvpcoz re samz re|samz codetype re why lineage source FACTIVA subcat snr code samz name South America fcode samz relay SYND relay|SYND codetype RELAY name Syndication source EXPANDER value SYND code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARUS subject|BARUS codetype SUBJECT title US code BARUS name US canbedisplaysubject true ruleid BARUS value BARUS status modified subject BARENERGY subject|BARENERGY codetype SUBJECT title Energy code BARENERGY name Energy canbedisplaysubject true ruleid BARENERGY value BARENERGY status modified subject BARTAKE subject|BARTAKE codetype SUBJECT title Barron's Take code BARTAKE name Barron's Take ruleid BARTAKE value BARTAKE canbedisplaybrand true status modified wordcount 677 wordcount|677 id facebook id|facebook news_tab_url https://www.barrons.com/articles/exxon-mobil-stock-could-surge-47-as-2020-may-finally-be-the-oil-giants-year-analyst-says-51575397318 Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Getty Images Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says

Exxon Mobil’s stock could surge by almost 50% as production ramps up and growth accelerates, according to Bank of America Merrill Lynch. Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says

Exxon Mobil’s stock could surge by 47% as production ramps up and growth accelerates, according to Bank of America Merrill Lynch. https://www.barrons.com/articles/exxon-mobil-stock-winning-streak-51568214445 https://www.barrons.com/articles/exxon-mobil-earnings-oil-price-stock-51572614864 https://www.barrons.com/articles/moodys-downgrades-exxons-credit-outlook-on-cash-flow-worries-51574442361 Exxon Mobil Stock Could Surge 47% as 2020 May Finally Be The Oil Giant’s Year, Analyst Says By Callum Keown Getty Images

Exxon Mobil’s stock could surge by 47% as production ramps up and growth accelerates, according to Bank of America Merrill Lynch.

BAML named the oil giant its top U.S. oil major pick for 2020 - with a target price of $100, up from $68 on Tuesday and predicted a step change in cash flow

The back story.

Exxon’s stock has been out of favor with investors for much of 2019, aside from a ten-day streak in September as oil prices briefly surged. The oil giant’s shares have dropped 0.8% year-to-date as lower commodity prices have canceled out the company’s production growth, while rival Chevron has edged 7% higher.

The company’s earnings of $3.2 billion - 75 cents per share - in the third quarter beat Wall Street estimates but were down from $1.46 per share a year earlier.

Moody’s downgraded Exxon’s credit outlook last month from Stable to Negative and said the company was outspending its cash flow to fund growth plans. Exxon has invested heavily in boosting production, including projects in Guyana and U.S. shale field the Permian Basin.

The company could also sell up to $25 billion worth of oil and gas fields in Europe, Africa and Asia, according to media reports, in a bid to pump more money into major projects - such as Guyana, Mozambique and Papua New Guinea.

What’s new.

Bank of America Merrill Lynch said 2020 could “finally be Exxon Mobil’s year” and that the stock could surge 47%, citing successful project execution and accelerating growth.

A “step change” in cash flow could also see the stock price climb to $100 - up from $68 in intraday trading on Tuesday, BAML said in a note.

“The inflection in Permian production is well under way while the first oil from Guyana confirmed for December kick starts what we expect to be 7-8 years of growth…” BAML analysts said.

BAML said the stock was its top U.S. oil major pick for 2020 and that counter cyclical investments and asset sales should vanquish market skepticism over whether it can outperform its peers.

It also expected non-core asset sales to beat Wall Street expectations.

Looking ahead

Exxon is outspending cash flow, as pointed out by Moody’s, but key production milestones in the Permian Basin and in Guyana point to the step change in cash flow predicted by BAML. Plans to sell $25 billion of assets by 2025 may well be accelerated as the company focuses on a new generation of projects. The out of favor stock has room to rise, but how far depends on production growth and oil prices.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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