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Can Exxon Mobil Stock Reach $80 In 2022?

Jan. 04, 2022 10:30 AM ETExxon Mobil Corporation (XOM)81 Comments


  • From 2020 to now has been a good start towards $80 for XOM.
  • Natural gas and LNG demand in Europe and Asia could lend themselves to a higher XOM price.
  • Keeping the DUCs in a row should lead to higher oil prices next year.
  • Reducing operating costs by $6 billion and buying shares back should increase earnings per share beyond oil price increases.
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Oil Prices Volatile As Coronavirus Lockdowns Decimate Demand

Dean Mouhtaropoulos/Getty Images News

Exxon (NYSE:XOM) is a popular and controversial stock. On Seeking Alpha in just the last month, we have seen a variety of ratings including a Bearish, a Neutral, four Bullish, and two Very Bullish.

Personally, I have

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Bill Zettler profile picture
Bill Zettler trained as a scientific programmer and has 40+ years of experience working in information technology. Bill previously worked for Abbott Labs and NORAD (North American Air Defense). Over the course of his career, he developed and sold accounting software and founded several software companies, knowledge which he now applies to identifying good investments. Bill is the leader of the investing group Turnaround Stock Advisory where he identifies stocks that are temporarily undervalued and/or misunderstood by the market. He provides analysis of financial metrics, market ratings, and illustrates how a company uses its excess cash whether it raises dividends, buys back shares, or tends to make acquisitions. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of XOM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (81)

For all this talk of US shale ramping up and spoiling the party, it’s not in any of their capital plans for 2022. Rightfully so, while OPEC+ still controls the market and has capacity to release. But even shale can’t turn on a dime in 2023, especially when their shareholders are spoiled with capital returns.

So the real question is: at what oil price will shale driller shareholders allow those companies to materially increase capex? It’s a bit of a moving target, of course, including for XOM. But if $80-100/bbl is the “new normal” for the next 5 years, then I’m looking at a $6+ dividend and $150 stock price in 5 years.
@everlast00 I would be disappointed if XOM were only $150 in five years. $150 in 2023 seems more likely, based on dramatically higher EPS projected for both 2023 and 2024 with a higher P/E ratio. The dividend will grow as will stock buybacks. All of this is based on an expectation that oil prices will remain well above $80 (Brent) for the forseable future.
PT Larry profile picture
Thanks for the article.
I don't know if XOM will reach $80 in 2022. Financial analysts are estimating from $72.25 to $73.02 in 12 months. Those targets are revised up or down as quarterly financial data are reported. So, who knows? I own XOM, love the dividend, and am happy with its recent stock performance.
PT Larry profile picture
@floridascene In my view, XOM will report earnings 2/1/2022 and soon thereafter the target price will be raised.
I doubt it. The labor supply chain bottleneck will be a long held headache. With less worker, less travel, less flight, less commercial energy consumption.
@JonathanSeagull Worldwide energy consumption is increasing and will continue to do so with an expanding world wide economy. Show us your numbers that prove otherwise.
Guaranteed, it’s 80 bucks.
I think XOM announced buybacks of over $10 billion will largely complete before the May Shareholder meeting using Excess cash flow above their relatively conservative oil price outlook (ie oil prices above 70 and higher gas/LNG prices). 4Q21and 1Q22 earnings should look great with lots of the price baked in. I expect a very disciplined (slow and gradual and thoughtful) approach on energy transition), the 15 G investment will be back loaded (several years away), primarily because of govt regulations/permitting/tax credits and other issues outside XOM control. More discoveries in Guyana.
I dont think, I know you hit the nail right on the head, great article.
Viking Raider profile picture
All fundamentals point to much higher valuation! The migration of investors can also be seen by the consistent rise in energy companies across the board! XOM is quite conservative and I believe they will outperform all year long and well into the end of this decade! By 2030 they will be a leading renewables energy company ammonia? Methanol? Hydrogen? Algae fuel? Who knows, but they will use their oil revenue to fund their positions and technology! I’m onboard for this enjoyable ride!
awayfromtheherd profile picture
Actually I think 80+ by March
@awayfromtheherd You didn't specify which oil. Brent is already $80.16 today, and $76.99 for WTI.

$80 is a good spot for oil to be, a goldilocks zone that has enough profit for existing operators but doesn't cause a reckless shale boom (again). But I predict the continued under-investment by oil-hating Wall Street and jawboning by the inexperienced Secretary of Energy (Granholm) mean FJB will help the middle east looney tune asylum will deliver > $100/barrel oil before too long. I expect $XOM to track that price, dollar for dollar.
awayfromtheherd profile picture
@Leo Plotkin 80+ for xom stock by March
@Leo Plotkin Investing in oil/gas right now is a bet that idiocracy will lose its war with the laws of thermodynamics. It won't even be close.
In all seriousness, when you look at the World's Standard of Living Pre-Oil it was Horses used as the primary transportation system and a very low standard of living. Now with oil, we have an incredible transportation system of personal cars used by most people and an incredible infrustructure and extremely advanced standard of living compared to Pre Oil. And there would be No Green Tech without Oil, or Rockets or anything else. We owe oil a lot. Yes we should stop burning fuel but first we need to have the Green Tech in place to keep a High Standard of Living for Humans around the world. Oil is Great it just will not be used to be burned in the 22nd Century. All is my opinion.
jagvocate profile picture
@nasa_rss I'm unaware of any populace that has raised their standard of leaving by transitioning to a less dense / less intensive fuel source. Hope the Greenies are right lol
LarryOswald profile picture
@nasa_rss My Thermodynamics professor (and textbook author) in 1960 made the same claim for the quantity of electricity production as an indicator (and cause ?) of human civilization.
@nasa_rss What happens to our standard of living when oil gets to point that it takes more energy than the energy that they are extracting? EROEI. There will always be a place for oil. That said, it is wise to develop alternative technologies before they are needed.
Ptstanford profile picture
Hope XOM gets back to its 6% dividend growth rate.

At the current price, this means in one year the dividend goes from 5.54% to 5.88%, 2 years... 6.24%, 3 years...6.63%, 4 years...7.04%, 5 years... 7.48%

So in dollars, in five years you've gone from $3.52 to $4.92

Thousand shares $3500 to almost $5000 per year or nearly 43% increase.
Lila f gas prices are the driver of Exxon stock and when the prices are down the stock has no other optio but to follow as evidenced by the drop las year into the $30.00 level. The dynamics are continuing to shift in a positive light for Exxon as Oil continues to increase in price and the stock price follows suit. In 2021 Exxon’s stock paid the price for maintaining its dividend through a very difficult time when other were cutting or reducing leading to a significant portion of debt. 2021 has allowed the repayment of a lot of that debt and expectations are that 4th quarter earning will far exceed expectations so the debt is getting back to an acceptable ratio. If oil stays in the high 70’s or increases Exxon should experience record earnings, and FCF and I expect that the stock will continue to rise accordingly. It’s a very good time to own energy stocks including Exxon
Current prices of oil and Nat Gas/LNG are irrelevant. Watch the forward price curves; cotango curve tells the energy story.
@42YearsInEnergy Forward price curve has been improving. (Flattening versus what it was months ago).
@DeZe100 Flattening forward curve implies market is seeing/nearing at least temporary peak, suggesting anticipated supply/demand getting closer to balance.
Ah, the ups and downs of the "all" business. Let's see, in May of 2007, XOM sold for $80 a share. Still it doesn't negate your investment thesis, but over the years, XOM has been a meh investment despite all those dividends. While you've collected those dividends, you've missed out on thousands of opportunities to double your money and double your dividends by selling puts. But hey, everyone to his own.
billtxxus profile picture
@Ruble Noon Sure you can pick any time period for a stock to show what one wants. My cost basis for XOM is under $40, bought in late 2020, so I am pretty happy.

I will grant you, that from 2015-2020 there was a secular decline in the oil business. The question I had in 2020, was is this decline over? It appears with the help of the greens, that yes oil prices will remain firm for years to come.
Remember when everyone was chewing them out for cutting costs and keeping the divvy?
@Charliedon'tsurf Who were the everyone that chewed them out for cutting costs and keeping the divvy?
@agsserv Ok, a bit of hyperbole. Let's say I read many comments on SA on Exxon articles around 2020 or so castigating them for the layoffs and for not lowering the dividend.
Blackmolly profile picture
I agree.
Marrk profile picture
Thanks for the article. XOM to $80 and beyond.

Long XOM
LarryOswald profile picture
Holders of XOM see narrowly the world and American politics while breathers of oxygen and grandparents of small children tend to be less sharply dogmatic.

And the "critical thinking skills are no longer taught in college." comment of one nostalgic old timer actually made me silently chuckle.
Blackmolly profile picture
@LarryOswald Holders of Exxon know that alt energy can't replace hydrocarbons. Exxon shareholders will reap massive rewards while keeping people from freezing to death or starving because we understand what it takes to keep the world functioning.
@LarryOswald "less sharply dogmatic"?? No cabal on earth has been as dogmatic as the climate change crowd.
LarryOswald profile picture
@Charliedon'tsurf See Charlie. That is rather dogmatic even though there is some truth to what you say.

@Blackmolly Alternate energy is already replacing hydrocarbons, slowly and never fully. I also am benefiting from XOM.
Dividend aristocrat XOM, nice yield.
jack kreg profile picture
Seems like crisis in all of gov, with Biden leading the way, has reached across the Atlantic to EU, where energy crisis from stupidity of ESG is now putting the EU into the deep freeze for winter, Jan is usually the coldest month in the year.
Sending the wool blanket across the pond to our friends in EU. Hopefully, they are quickly learning the TOTAL fantasy of green new deal!
Learning the cold way, lol
secorewb profile picture
@jack kreg maybe the Ukraine can now use the blankets Obama sent them a decade ago. What a forward thinker.
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