On Friday, analysts at Canaccord Genuity initiated supermajor oil company Exxon Mobil Corporation (XOM) with a “Hold” rating, citing its current valuation and potential challenges ahead.
The analysts give XOM a “Hold” rating with a $95 price target. This target suggests a 7% upside to Thursday’s closing price of $88.59.
A Canaccord Genuity analyst commented, “We are initiating coverage on ExxonMobil (“Exxon”) with a Hold rating, and a target price of $95. Exxon has an enviable reputation for operational excellence, financial strength and cash returns to shareholders, but we think these attributes are fully reflected in its premium valuations. Furthermore, we think Exxon faces challenges in three key areas: 1) we are unconvinced that its growth will match that of many of the others, 2) we expect much (but not all) of its lead vs the group on ROACE to be eroded away and 3) we do not expect the current level of cash distributions to shareholders to be sustainable beyond 2013 without Exxon continuing the present level of disposals.”
Exxon Mobil shares were mostly flat during morning trading on Friday. The stock is up about +2% over the past year.
The Bottom Line
Shares of Exxon Mobil Corp. (XOM) have a dividend yield of 2.58% based on Friday’s intraday trading price of $88.54 and the company’s annualized dividend payout of $2.28 per share.
Exxon Mobil Corporation (XOM) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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