Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why ExxonMobil Corporation Slipped This Morning

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of ExxonMobil Corporation (NYSE: XOM  ) slipped nearly 1% this morning after Bank of America downgraded the oil giant from neutral to buy.

So what: Along with the downgrade, B of A lowered its price target to $106 (from $110), representing about 7% worth of upside to yesterday's close. While momentum traders might be attracted to the stock's strong run in recent months, B of A believes that headwinds outside of Exxon's control -- production cuts announced by the Dutch government and a looming lease expiry in the UAE -- will likely weigh on production in 2014.

Now what: According to B of A, Exxon's risk/reward trade-off is pretty balanced at this point. "A series of recent announcements outside XOM's control risks cancelling out prod'n growth in 2014," noted B of A. "The combined loss of ~190,000 boepd essentially wipes out planned growth of ~4% in 2014; while the impact on earnings is modest, reassessing XOM's broader portfolio leads us to raise the issue of a potentially higher Gov't take at its flagship RasGas development as consequence of higher oil prices in recent years." When you couple Exxon's operating headwinds with the stock's strength of late, taking some money off the table certainly seems like a prudent move. 

More compelling energy picks for 2014
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2802233, ~/Articles/ArticleHandler.aspx, 9/1/2015 10:10:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

Today's Market

updated Moments ago Sponsored by:
DOW 16,219.96 -308.07 -1.86%
S&P 500 1,933.81 -38.37 -1.95%
NASD 4,709.26 -67.25 -1.41%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 9:54 AM
XOM $72.84 Down -2.40 -3.19%
ExxonMobil Corp CAPS Rating: ****