Exxon Mobil (XOM) Valuation: Assessing the Stock After Strategic Entry Into Graphite and Battery Materials

If you’re following Exxon Mobil (XOM), the latest move might give you pause to reconsider your investment thesis. The company has just announced plans to acquire several assets from Superior Graphite, including a production facility and a research center, stepping up its diversification into graphite, a key material for batteries used in electric vehicles and energy storage. This shift, flagged by Vice President Dave Andrew as a long-term strategy, signals how Exxon Mobil is looking beyond oil and gas to tap into surging demand for cleaner technologies.

This announcement has landed at a time when investors are already parsing Exxon Mobil’s momentum. Over the past year, the stock has returned just over 6%, with modest growth continuing in recent months. While shares have ticked higher in the past month, performance in the past three years has been much stronger, and recent company events, including high-profile conference presentations, underscore management’s push to adapt to new market dynamics.

So after this year’s steady but unspectacular stock movement, is Exxon Mobil priced for future growth in the EV era, or is the market already factoring in the benefits of this transformation?

Most Popular Narrative: 11% Undervalued

According to the narrative by Richard_Bowman, Exxon Mobil is currently trading at an 11% discount to fair value. The case for undervaluation hinges on a carefully executed margin-focused strategy and decisive capital allocation.

“ExxonMobil is prioritizing profitability over growth with a focus on high value assets. Current cost saving measures are on track to deliver $10 billion in annual cost savings. In time these measures will be partially offset by inflation related cost increases. By keeping production steady, the company will be able to focus on integrating various parts of its supply chain to improve efficiency and reduce costs.”

Intrigued by what drives this bullish view? Behind this narrative lie hard numbers: think efficiency breakthroughs, calculated revenue growth, and a future profit multiple that could change how investors view Exxon’s potential. Curious which financial levers are set to move the needle for Exxon’s valuation? Uncover the key drivers fueling this undervaluation call.

Result: Fair Value of $126.39 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, investors should note that stalled reserve expansion or unexpected margin pressures from faster renewable investment could quickly challenge this bullish outlook.

Find out about the key risks to this Exxon Mobil narrative.

Another View: Market-Based Comparison

While the DCF model suggests upside potential, a look at the current price compared to earnings across the industry suggests Exxon Mobil may be more expensive than some of its US oil and gas peers. Could the market be overestimating future gains?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Exxon Mobil to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Exxon Mobil Narrative

If you’re inclined to dig deeper or want to interpret the financial story your own way, you can shape your own narrative in just minutes. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Exxon Mobil.

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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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