ExxonMobil Holdings (XOM) is reportedly competing to buy Shell’s U.S. chemicals business, an asset that could be valued at around US$8 billion and would add four large Gulf Coast and Pennsylvania facilities to its portfolio.
For context, ExxonMobil Holdings’ share price has gained 2.24% over the past day and 5.86% over the past month. Its year to date share price return of 34.16% and 1 year total shareholder return of 47.63% suggest momentum has been building alongside higher oil prices, recent Middle East conflict related moves in energy stocks, and renewed headlines about Venezuela and portfolio reshaping opportunities such as the potential Shell U.S. chemicals acquisition.
Scan how ExxonMobil Holdings compares with other large energy producers that are showing strong price momentum and cash generation across our curated list of 50 high quality undervalued stocks.
After this sharp move in ExxonMobil Holdings and fresh headlines around Shell’s U.S. chemicals assets, the market price now sits only slightly below the average analyst target but well above one intrinsic value estimate. So where does fair value really sit?
Most Popular Narrative: 3.2% Undervalued
The most followed valuation narrative for ExxonMobil Holdings puts fair value at $169.91, slightly above the last close of $164.55. This helps frame today’s debate about potential upside from here.
Industry-wide underinvestment in new hydrocarbon production is tightening supply. Combined with Exxon's scale and execution of high-return projects, this is described as positioning the company to benefit from higher sustained oil and gas prices, supporting strong earnings and cash flow.
Read the complete narrative. Read the complete narrative.
Want to see what underpins that fair value for ExxonMobil Holdings? The narrative focuses on measured revenue growth, rising margins, and a richer earnings multiple profile. It also explores how these elements fit together without relying on extreme growth assumptions.
Result: Fair Value of $169.91 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the ExxonMobil Holdings narrative could be challenged if long term decarbonization policies curb oil and gas demand, or if weak chemical margins persist for longer than expected.
Find out about the key risks to this ExxonMobil Holdings narrative.
Another View on ExxonMobil Holdings Valuation
While the most followed narrative points to ExxonMobil Holdings being 3.2% undervalued, the market is also pricing the stock at a P/E of 20.7x. That is higher than both the US Oil and Gas industry average of 12.8x and the peer average of 17.1x, yet still below a fair ratio of 27.8x based on regression analysis. This mix of richer current pricing and room to move toward the fair ratio raises a simple question for investors: Is this pricing a cushion or a source of valuation risk if expectations change?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment clearly focused on ExxonMobil Holdings’ potential rewards, it makes sense to review the data yourself and decide quickly where you stand. To see what has investors optimistic right now, take a closer look at the 4 key rewards.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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