Exxon looks fully valued, Citigroup says as it downgrades shares

Exxon Mobil (XOM -1.1%) has gained 14% in the past 12 months, and the strong performance prompts Citigroup’s Faisel Kahn to downgrade shares to Neutral from Buy.

XOM has been rising on expectations for a recovery from a difficult year for production and a record level of refining maintenance that weighed on 2013 earnings, but the firm believes this is now largely priced into the stock.

However, Citi raises its price targets for XOM, Chevron (CVX -0.7%), ConocoPhillips (COP +0.1%) and Occidental Petroleum (OXY -0.2%) largely based on a reduction of its cost of capital assumptions and the approaching start-up of many large scale upstream projects.

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Comments (11)
  • User 353732
    , contributor
    Comments (5161) | Send Message
    Sensible individual investors pay little heed to Wall St "research" which is designed to drive trading profits for Big Money and induce little money to engage in needless transactional activity.
    Successful individual investors closely study both the industry and specific companies and rely on their own wit and insight. for making buy, sell or hold decisions.
    9 Jan 2014, 12:49 PM Reply Like
  • charliezap
    , contributor
    Comments (2268) | Send Message
    I don't agree with you on the value of Wall Street research. I find the reports that are put out be the major brokerage firms to be a pretty useful source of information. One does not have to agree with their recommendations, but there is far more insight and more to-the-point analysis in reports from, say, Citi, Credit Suisse, or Merrill, than one finds in the typical SA article. Many SA authors fall back on simplistic ratios such as Price/Book or Price/Sales that are often completely irrelevant, depending on the industry. I say this as a Citi customer, and a Schwab customer (with access to reports from Credit Suisse.) On the other hand, I don't like the computerized reports from Schwab and outfits such as Ned Davis.
    9 Jan 2014, 04:01 PM Reply Like
  • StepUp
    , contributor
    Comments (553) | Send Message
    so on XOM they downgraded and raised their price target? Gotta love these guys!
    9 Jan 2014, 01:36 PM Reply Like
  • charliezap
    , contributor
    Comments (2268) | Send Message
    Actually, raising the price target makes perfect sense. The last report that Citi put out on XOM was over 5 months ago, with a TP of $97. XOM now exceeds that, and the new TP is $108. (From StreetInsider: "Citi downgraded ExxonMobil (NYSE: XOM) from Buy to Neutral with a price target of $108.00.") Since the projected gain from the current price is less than 10%, it probably makes sense to rate XOM only at HOLD rather than BUY, as there are likely to be better opportunities elsewhere, including CVX with higher yield, higher future growth, and lower P/E.
    9 Jan 2014, 03:48 PM Reply Like
  • treyminator
    , contributor
    Comments (85) | Send Message
    Citi downgrades but raises price target for XOM. This is basic double talk, cover your @$$, minor league b.s. If you're going to make a call on a stock for the firm's investors, then do it one way or the other. Don't hedge your opinion so you can say "I was right" regardless of the outcome.
    9 Jan 2014, 10:47 PM Reply Like
  • drewsworld
    , contributor
    Comments (4) | Send Message
    COP is attractively priced right now at $69.25
    10 Jan 2014, 12:45 PM Reply Like
  • alex22288
    , contributor
    Comments (49) | Send Message
    10 Jan 2014, 04:48 PM Reply Like
    , contributor
    Comments (5157) | Send Message
    COP is a bona fide STEAL at $68.87
    Bought more with a 4.01% yield. How could you not ?


    The manic lemmings that bought xom because of buffett will eventually turn to Value,Great Management, and Excellent Sustainable Dividends and Buybacks and buy COP, CVX, and BP .


    Imo, COP is $85 + in 2014.
    11 Jan 2014, 06:07 PM Reply Like
  • Jeffevang
    , contributor
    Comments (3) | Send Message
    Yeah but Bahamas1, Buffet was and is also large on COP (and PSX).
    14 Jan 2014, 11:23 AM Reply Like
    , contributor
    Comments (5157) | Send Message
    I Realize buffett owns COP, and has for a long time, even though he recently sold some (maybe to help fund the xom buy).


    It was just humorous to note that after buffett's xom position was announced, cnbc and specifically cramer, all of a sudden became xom fans even though for YEARS they had a total disdain for xom.


    Hell, just a couple of weeks before on the "Lightening Round" on cramer"s show he chose CVX over xom and said xom was a "non starter" and a "deservedly unliked stock".


    Gee, go figure.
    14 Jan 2014, 12:07 PM Reply Like
    , contributor
    Comments (5157) | Send Message
    Alsonote who, all of a sudden, is sponsoring some of the shows on cnbc.
    Again the transparency is obvious and not the way it was meant to be.
    15 Jan 2014, 09:20 AM Reply Like
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