Evaluating Exxon Mobil Stock After Major Investments in Low-Carbon Growth for 2025

• Wondering if Exxon Mobil might be a hidden value, or if the market has already factored in all the upside? Here is a breakdown of what has been happening and where the valuation stands.
• Over the past 12 months, Exxon Mobil’s stock has nudged up by 1.8%, and it has seen a 6.9% gain so far this year, despite a dip of 1.1% in the last week.
• Recently, news around Exxon Mobil has focused on its ongoing push into low-carbon solutions and major investments in expanding production capacity. Headlines about its strategic acquisitions and partnerships have sparked both optimism over long-term growth and questions about the shifting risk profile.
• On a value check, Exxon Mobil scores 4 out of 6 for undervaluation, which puts it well above most industry peers. Next, we will look at how traditional valuation methods compare, and why you might want to consider an even smarter way to assess the company’s real worth.

Find out why Exxon Mobil's 1.8% return over the last year is lagging behind its peers.

Approach 1: Exxon Mobil Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future free cash flows and then discounting those amounts back to today’s dollar value. This approach helps investors understand what the company may truly be worth now, based on its future earning potential rather than current market fluctuations.

For Exxon Mobil, the latest reported Free Cash Flow (FCF) was $32.4 Billion. Analyst estimates suggest steady growth from here, with projected FCFs reaching around $44.7 Billion by 2029. After that, further increases are projected using established industry growth rates, taking Exxon Mobil’s annual FCF even higher over the following years. It is worth noting that analyst estimates tend to cover up to five years, and any projections beyond that are extrapolated. All cash flow figures are based in $.

Based on these projections and using the 2 Stage Free Cash Flow to Equity model, Exxon Mobil’s intrinsic value comes out to $288.47 per share. This implies the stock is trading at a 60.2% discount to its estimated fair value.

For investors focused on underlying cash flow rather than just headline earnings, the DCF suggests Exxon Mobil could be significantly undervalued relative to its cash-generating power right now.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Exxon Mobil is undervalued by 60.2%. Track this in your watchlist or portfolio, or discover 831 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Exxon Mobil.

Approach 2: Exxon Mobil Price vs Earnings

For profitable companies like Exxon Mobil, the Price-to-Earnings (PE) ratio is often the most popular and suitable valuation metric. It quickly tells investors how much they are paying for each dollar of current earnings, making it a go-to measure for established, consistently profitable businesses.

Of course, a company’s PE ratio does not exist in a vacuum. Growth expectations and perceived risks are critical. Investors typically accept higher PE ratios for companies with strong growth prospects and lower risk profiles, while slower-growing or riskier companies tend to trade at lower PEs.

At present, Exxon Mobil’s PE ratio is 15.77x. The average for its industry peers is 21.72x, while the broader Oil and Gas sector trades at 12.59x. On the surface, Exxon Mobil is trading below its peer group but above the industry average.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio for Exxon Mobil is 21.66x, which is the multiple the stock would deserve after accounting for its earnings growth, profit margins, scale, industry, and risk. Unlike a simple peer comparison, the Fair Ratio takes a holistic view of the company’s fundamentals and environment, offering a more custom-fit perspective of value.

Comparing Exxon Mobil’s current PE of 15.77x to its Fair Ratio of 21.66x suggests the stock is trading at a considerable discount to what it could reasonably justify. This points toward Exxon Mobil being potentially undervalued using this metric.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1394 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Exxon Mobil Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives.

A Narrative is a simple yet powerful tool that lets investors build and share their own story about the company, backed by their assumptions about Exxon Mobil’s future revenue, earnings, margins, and ultimately, its fair value. By linking a company’s unique story to a concrete financial forecast and a personalized fair value, Narratives help you see beyond headline numbers and factor in what matters most to you.

On Simply Wall St’s Community page, you can easily access and compare Narratives from millions of other investors, making it incredibly accessible for all experience levels. Narratives empower you to make smarter decisions about when to buy or sell, since you can instantly see how your Fair Value assumptions stack up against the current Price.

The best part is, Narratives update dynamically when new information such as breaking news, earnings reports, or analyst guidance arrives, keeping your viewpoint fresh and actionable.

For example, one investor’s Narrative today might estimate Exxon Mobil’s fair value at $132 per share, seeing 17.5% upside driven by operational excellence and energy transition. Another could project a higher value of $174 per share based on more bullish assumptions about Guyana production and future margins. This demonstrates just how flexible, personalized, and insightful the Narrative approach can be.

Do you think there's more to the story for Exxon Mobil? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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