Our 12-month price target for the ExxonMobil is $115. Our DCF is calculated using Citi Research’s commodity view of $68.7/b 2025E and long-term US$55/b (Brent oil, real 2021 money); and mid-cycle refining and chemicals from 2026. Our DCF uses explicit forecast to 2030 and then a terminal value that imbeds 2.0% terminal growth. We use a discount rate of 6.5%, calculated using CAPM.

Our rating on ExxonMobil considers a number of industry and company-specific risk elements, which could cause the shares to deviate from our target price:

• Commodity Prices – ExxonMobil’s earnings are sensitive to changes in oil and natural gas prices, and refining margins, all of which can fluctuate significantly as a function of economic and geopolitical forces. 

• Currency – ExxonMobil’s principal earnings and costs are in US$, although significant moves in local currencies can have some impact to local cost structures and local revenues (e.g. timing of local fuel price changes).

• Political – Changing political forces can affect ExxonMobil’s legal ownership, fiscal take and pace of development activity in any country in which it operates.

• Natural and Man-Made Disasters – ExxonMobil’s operating activities can be severely disrupted by the effects of natural disasters or industrial accidents. Accidents may bear the burden of additional costs for remediation, fines and from restrictions on future business activities. 

If any of these risk factors has a greater downside impact than we anticipate, XOM’s share price will likely have difficulty attaining our target price. Conversely, if the impact of any of these upside risks is greater than we anticipate, the stock could materially exceed our target price.