ExxonMobil poised to reach half-trillion-dollar market cap with rising oil prices

From The Motley Fool: 2024-04-03 04:39:00

ExxonMobil is poised to potentially reach a half-trillion-dollar market cap by 2024, fueled by the recent surge in energy sector stocks, driven in part by rising crude oil prices. With Brent crude oil prices up 11% in the first three months of the year, ExxonMobil stands to benefit from the current market conditions.

The merger with Pioneer Natural Resources in 2023 initially caused concerns as Exxon’s stock and oil prices dropped, but the recent rebound in oil prices to around $87 per barrel for Brent and $83 per barrel for West Texas Intermediate bodes well for Exxon’s growth prospects. The company’s corporate plan is based on $60 per barrel Brent, making current oil prices a dream scenario for ExxonMobil.

If Exxon can replicate last year’s results, it would be a significant win for shareholders, given its strong financial performance and robust free cash flow. The company’s focus on returning value to shareholders through buybacks and dividends, combined with a solid balance sheet, sets the stage for potential growth and outperformance in 2024 and beyond.

Exxon’s transformation from high net debt to virtually no debt, thanks to improved financial health driven by high oil prices, has positioned the company to allocate its cash flow towards rewarding shareholders and investing in future growth opportunities. Despite the dependency on oil prices, Exxon’s resilience at various price levels and solid financial metrics makes it an attractive investment option for 2024.



Read more at The Motley Fool: Up 11% in 1 Month, Is ExxonMobil About to Hit a New All-Time High?