Exxon Mobil stock forecast as WTI Crude rallies above $71

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Nov 29, 2021
  • Exxon Mobil shares on Monday edged slightly higher after a rebound in oil prices.
  • The WTI Crude oil bounced from Friday’s decline to trade above $71 per barrel.
  • OPEC has suspended output increase amid Omicron fears.

On Monday, Exxon Mobil Corp (NYSE:XOM) shares edged slightly higher after oil prices bounced back to recoup last Friday’s losses. The WTI Crude oil last week fell below $70 for the first time since September amid fears the Omicron variant could affect global demand.

However, the light crude oil price bounced back on Monday to trade at about $71.56 after OPEC suspended plans to increase output. The membership has been increasing production output on a monthly basis in a bid to return to pre-pandemic output levels. 

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With the suspension of capacity increase, oil stocks like Exxon could witness a significant rebound in prices.

Is Exxon undervalued?

From an investment perspective, Exxon Mobil shares trade at a compelling forward P/E ratio of 10.49, thus making the stock an exciting option for value investors.

However, analysts expect its earnings per share to plummet by more than 265% this year before bouncing back by about 17.63% next year.

Therefore, growth investors may opt to monitor the performances before betting on the stock.

Source – TradingView

Technically, Exxon Mobil shares seem to be trading within a descending channel formation in the intraday chart. However, the stock has recently bounced off the 100-day moving average to find the trendline resistance.

Nonetheless, with OPEC suspending output increase, the current rebound could continue depending on how the world responds to Omicron.

Therefore, investors could target extended gains above the trendline resistance at $64.30, or higher at $66.38, while $59.42 and $56.97 are crucial support zones.

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