Came across this article on Seeking Alpha: How much is Exxon worth?
Alot of IFs: If it breaks through 90.58 level, next stop is definitely $94, which also happens to be my target for profit taking. If however, its not able to break through to next level within by end of April, i will not be surprised to see it drop to below $90 and tade between the parallel channel down throughout May-August.
*Disclaimer: I have a small position in ExxonMobil (XOM) and
right now I am adopting a “hold and see” attitude. However I have no plans to
initiate any positions within the next 72 hrs and highly recommend you do your
own research to determine your own suitable entry and exit positions.
According to the author's stock analysis, ExxonMobil is now trading close to the lower boundary of its fair value range. His 5-year discounted-earnings-plus-book-value model estimates a fair value for Exxon Mobil between $86.53 to $124.18 per share. Current price of XOM is around $90. This means there is an upside potential of almost 37% to reach its fair value maximum.
Ok if you remember in my previous post on ExxonMobil, i estimated current value of XOM to be around $94. (which is based on technical analysis) I however would agree with the author that the true potential for XOM is $125 but only if the market sentiments remain bullish all year long. If we base it on long-term earnings growth expectations for an energy supplier such as Exxon, the stock is definitely undervalued. We need to have a proper timeframe for this new target to be reached. Remember, ExxonMobil benefits from its exposure to natural gas, even if the prices remain low in the near future.
Lets face the facts; the global economy is still recovering, energy demand will eventually rise, energy sector stocks should grow well over the next 2 years. But wait, we have had uneven, semi-exciting growth in the past 5 years since 2008, ALREADY. Some companies are still have low P/E values. We are nowhere near market tops. How long do you think the market will keep rising? Thanks to the FED and BOJ, their Quantitative Easing efforts will probably prolong the market rise for a couple more years. Its very hard to say exactly how much higher XOM will keep rising, but based on fundamentals alone, XOM looks attractive even at this price. Look at the chart below, technically XOM is testing current resistance levels of $90.58.
Alot of IFs: If it breaks through 90.58 level, next stop is definitely $94, which also happens to be my target for profit taking. If however, its not able to break through to next level within by end of April, i will not be surprised to see it drop to below $90 and tade between the parallel channel down throughout May-August.
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