Exxon Mobil (NYSE:XOM) shares could surge nearly 50% as production ramps up and growth accelerates, according to BofA Merrill Lynch, which names the company its top U.S. oil major pick for 2020 and raises its stock price target to $100 from $68.
XOM has been out of favor with investors, with shares slipping ~1% YTD as lower commodity prices have canceled out the company's production growth, but BAML believes successful project execution and accelerating growth could mean 2020 will finally be Exxon Mobil's year.
The inflection in Permian production is well under way while the first oil from Guyana confirmed for December kick starts what we expect to be 7-8 years of growth, BAML says.
XOM is outspending cash flow, but key production milestones in the Permian Basin and in Guyana prompt BAML to predict a step change in the company's cash flow.
XOM's average Sell Side Rating and Quant Rating are Neutral, while its Seeking Alpha Authors' Rating is Bullish.