ExxonMobil Corp’s (XOM) market
capitalization is around $379 billion, which makes it the world’s
largest non-state-owned oil company in terms of market cap. This article
takes a look at the base, bull and bear cases for the company’s stock,
and a look into why its recent selloff makes it a good buy.
The base case target price for Exxon is
$92.52, assuming that it will earn $8.54 per share for the next year and
the P/E multiple at which Exxon is currently trading (10.84x) will not
expand. We have calculated the EPS value using our EPS model with
$106.17 per barrel (bbl) as the Brent crude oil price for next year,
which is also the mean sell side estimate.
The estimate for the oil price assumes
that the Federal Reserve will quit its quantitative easing program in
the last quarter of 2014; geopolitical unrest in the Middle East and
North Africa will ease; and OPEC producers like Saudi Arabia, UAE and
Kuwait will develop existing reserves. XOM.
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