ExxonMobil's (XOM) Global Refining Business Underappreciated, Projected Free Cash Flow of $3.6 Billion by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: seekingalpha
- Refining Capacity Advantage: ExxonMobil (XOM) controls nearly 4.1 million barrels per day of refining capacity across 15 refineries, providing earnings stability and a hedge against declining crude prices.
- Earnings Growth Potential: A $1 increase in refining margins is projected to add approximately $800 million to annual earnings in Exxon’s energy products segment, highlighting its robust profitability.
- Free Cash Flow Expectations: Analysts project that ExxonMobil's downstream energy products business will generate about $3.6 billion in free cash flow by 2026, rising to $5.0 billion by 2029, accounting for around 10% of total free cash flow.
- Investment Return Outlook: UBS maintains a Buy rating on ExxonMobil (XOM) with a 12-month price target of $145, implying over 20% upside from recent levels, indicating that the durability and earnings power of its refining and integrated operations are undervalued.
Analyst Views on XOM
Wall Street analysts forecast XOM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for XOM is 131.08 USD with a low forecast of 115.00 USD and a high forecast of 156.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
11 Buy
4 Hold
0 Sell
Moderate Buy
Current: 122.910
Low
115.00
Averages
131.08
High
156.00
Current: 122.910
Low
115.00
Averages
131.08
High
156.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
