NEW YORK (TheStreet) -- Exxon Mobil (XOM) shares are up 0.84% to $85 in afternoon trading on Monday despite falling oil prices after analysts at Bank of America/Merrill Lynch raised the company's price target to $106 from $103.
Analysts at the firm believe that unlike Chevron (CVX), the bulk of Exxon's capital expenditures have already peaked.
The price target represents a potential 24.7% upside from the stock's current trading price.
Industry standard Brent crude for July delivery is up 1.07%, or 68 cents, to $62.63 per barrel while West Texas crude is also falling 1.69%, or $1, to $58.13 per barrel in trading today.
TheStreet Ratings team rates EXXON MOBIL CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate EXXON MOBIL CORP (XOM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- XOM's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that XOM's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.5%. Since the same quarter one year prior, revenues fell by 36.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for EXXON MOBIL CORP is rather low; currently it is at 18.89%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 8.34% is above that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 45.7% when compared to the same quarter one year ago, falling from $9,100.00 million to $4,940.00 million.
- You can view the full analysis from the report here: XOM Ratings Report