ExxonMobil (XOM) has emerged as a surprising high performer in the stock market, with shares surging over 60% in the past year, significantly outpacing the S&P 500’s 30% gain. This rally is largely attributed to rising oil prices driven by geopolitical tensions in the Middle East, which have bolstered the company’s upstream profits. ExxonMobil, with a diverse operational footprint across 56 countries, is strategically expanding its production capabilities, particularly in the Permian Basin and Guyana.
The company’s earnings per share (EPS) growth is projected to accelerate, with a 14% compound annual growth rate (CAGR) expected from 2025 to 2028. Key drivers include increased production from its Permian Basin operations and a ramp-up in output from Guyana. While rising oil prices may pressure its downstream margins, ExxonMobil’s scale and diversification are likely to mitigate these impacts.
Looking ahead, ExxonMobil’s stock appears reasonably valued at 20 times this year’s earnings, with a forward yield of 2.6%. If oil prices remain elevated, analysts suggest the stock could rise another 10% in the next year, making it a compelling consideration for portfolio managers.
Source: fool.com