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Analyst says InterOil shareholders should sell Exxon post-buyout

Oct. 21, 2016 10:22 PM ETExxon Mobil Corporation (XOM) StockCHRD, XOM, HAL, HES, MRO, IOCBy: Carl Surran, SA News Editor14 Comments
  • Raymond James analyst Pavel Molchanov has long been bearish on ExxonMobil (NYSE:XOM), and now he recommends the same advice for current InterOil (NYSE:IOC) shareholders following XOM's buyout: Sell.
  • Molchanov says XOM is poorly positioned to take full advantage of a sustained oil price recovery, as the company's structural overweight to refining, chemicals, and (within upstream) non-LNG gas does not directly benefit from rising oil prices; he also says XOM shares already are pricing in long-term oil prices at an above-consensus WTI at $70/bbl.
  • For current IOC shareholders, Molchanov says sell the post-buyout shares and use the proceeds to reinvest into any of a wide range of oil-levered stocks such as Halliburton (NYSE:HAL), Hess (NYSE:HES), Marathon Oil (NYSE:MRO) and Whiting Petroleum (NYSE:WLL).
  • Molchanov believes the IOC founder's last-ditch attempt to delay XOM’s purchase will not succeed; the next hearing is scheduled for Oct. 31.

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