Exxon Mobil Stock Moves Higher on Bull Notes

The majority of analysts are skeptical of Exxon Mobil stock

Digital Content Manager
Jun 15, 2021 at 9:42 AM
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The shares of Exxon Mobil Corporation (NYSE:XOM) are up 1.2% to trade at $62.83 this morning, after a price-target hike from Credit Suisse to $72 from $69. Meanwhile, Bank of America Securities reiterated its "buy" rating, predicting the energy giant is likely to hike its dividend before the end of 2021 thanks to rebounding oil prices and cost-cutting initiatives. 

Exxon Mobil stock has spent the last month trying to to overtake its May 10 annual high of $64.02. Support is in place at the shares' 60-day moving average, a trendline not breached on a closing basis since November, a few weeks before our "buy the dip" piece in December. Though XOM remains far from its pre-pandemic levels over $70, the stock is up 51% in 2021.

Analysts were mostly hesitant towards Exxon Mobil stock coming into today, with 10 of the 16 in coverage carrying a tepid "hold" rating, while six said "strong buy." Meanwhile, the 12-month consensus target price of $64.81 is a slight 3.7% premium to XOM's current levels.

The options pits have been more optimistic, with calls popular. This is per XOM's 50-day call/put volume ratio of 4.50 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 95th percentile of its annual range. In other words, long calls are being picked up at a faster-than-usual rate in the last two months.

Now seems like a great time to bet on the equity's next move with options. The security's Schaeffer's Volatility Index (SVI) of 26% sits in the extremely low 3rd percentile of its 12-month range, suggesting option players are pricing in low volatility expectations at the moment. 

Finally, XOM's Schaeffer's Volatility Scorecard (SVS) ranks at 89 out of 100. This is great news for options buyers, as it implies the stock usually outperforms these volatility expectations. 

 

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