Exxon Mobil shares are up more than 40% YTD. Here are the next targets

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the outdoors, enjoys… read more.
on Mar 29, 2021
  • Bank of America remains bullish on Exxon Mobil
  • Exxon Mobil expects a successful 2021, and this is stock that should be on your watch list
  • Moody's downgraded Exxon Mobil's debt ratings last week to Aa2 from Aa1

Exxon Mobil (NYSE: XOM) shares have advanced more than 40% since the beginning of 2021 year, and the current share price stands around $57. Bank of America remains bullish on Exxon Mobil, and the company is well-positioned as analysts remain optimistic about crude oil in 2021.

Fundamental analysis: Moody’s downgraded Exxon Mobil’s debt ratings last week to Aa2 from Aa1

Exxon Mobil shares are advancing last several weeks, supported by expectations that crude demand could rebound near pre-pandemic levels in the second half of the year. With more deployment of the vaccines, analysts expect that oil demand will continue to grow, and they remain very optimistic about 2021 in terms of growth, especially in the second half.

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Bank of America continues to keep a buy rating on Exxon Mobil as the company remains well equipped to outperform in a post COVID19 environment. Exxon Mobil’s 6% dividend looks safe, the company expects a successful 2021, and this is stock that should be on your watch list.

The company decreased its revenue in 2020 to $178.57B from $255.58B in 2019, but the growth projects will ensure that the numbers will be moving up in the future. This company’s fundamentals are not bad, and with the market capitalization of $244B, Exxon Mobil is reasonably valued relative to the competition.

On the other side, Moody’s downgraded Exxon Mobil’s debt ratings last week to Aa2 from Aa1. According to Moody’s, the company’s outlook remains stable, but the policy of maintaining its dividend will slow debt reduction.

“With the company maintaining its dividend, negative free cash flow topped $17B and reported debt increased by nearly $21B, or more than 40%, in 2020. The company’s debt levels have significantly increased since 2018, but its financial leverage as measured against proved reserves and book capitalization measures remains relatively low compared to most of its major oil company peers, and Moody’s expects debt to meaningfully decline over the next several years thereby improving financial leverage metrics,” Moody’s reported.

Technical analysis: Bullish trend remains intact

Exxon Mobil stock is trading just a couple of dollars below the 2021 record level, and the first sign of the trend reversal could be if the price falls below the $50 support level.

Data source: tradingview.com

The important support levels are $55 and $50; $60 and $65 represent the resistance levels. If the price jumps above $60 resistance, it would be a signal to buy shares, and the next target could be around $62.5. On the other side, if the price falls below $50, it would be a firm “sell” signal, and the next target could be around $45 or even $40.

Summary

Exxon Mobil shares have advanced more than 40% since the beginning of 2021 year, and the current share price stands around $57. Bank of America continues to keep a buy rating on Exxon Mobil, but it is important to say that Moody’s downgraded Exxon Mobil’s debt ratings last week to Aa2 from Aa1. Despite this, the company’s outlook remains stable, and the first sign of the trend reversal could be if the price falls below the $50 support level.

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