Has the Recent Slowdown in Exxon Mobil Shares Opened a Fresh Opportunity in 2025?

• Wondering if Exxon Mobil is still a buy after its huge run over the last few years, or if the easy money has already been made? You are not alone.
• Despite a 240.2% gain over 5 years and a solid 10.1% return over the last year, the stock has cooled recently, slipping 3.0% over the past week and 3.9% over the last month, while still up 6.9% year to date.
• Recent moves have been shaped by shifting expectations for long term oil and gas demand and renewed focus on energy security, as markets digest Exxon Mobil's aggressive investment in large scale projects and its growing low carbon initiatives. At the same time, policy debates around emissions targets and global supply constraints have added an extra layer of volatility to how investors are pricing future cash flows.
• Right now, Exxon Mobil scores a 4/6 valuation check score, suggesting it screens as undervalued on most but not all of our metrics. In the next sections, we will unpack how different valuation approaches stack up, before finishing with a more holistic way to think about what the stock is really worth.

Exxon Mobil delivered 10.1% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

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

A Discounted Cash Flow model estimates what a company is worth today by projecting the cash it can generate in the future and discounting those cash flows back to the present.

For Exxon Mobil, the model starts with last twelve month free cash flow of about $28.1 billion and projects it forward using a 2 stage Free Cash Flow to Equity approach. Analyst forecasts drive the first few years, with free cash flow expected to rise into the mid $30 billion range within the next several years, then continue climbing to around $52.3 billion by 2035. Beyond the explicit analyst window, Simply Wall St extrapolates growth rates to extend the cash flow curve.

Discounting all these projected cash flows back to today produces an estimated intrinsic value of roughly $247.04 per share. Compared with the current share price, this implies the stock is about 53.6% undervalued and indicates the market is applying a sizable discount to Exxon Mobil's long term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Exxon Mobil is undervalued by 53.6%. Track this in your watchlist or portfolio, or discover 909 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 a mature, consistently profitable company like Exxon Mobil, the price to earnings ratio is a practical way to gauge valuation, because it directly links what investors pay today to the profits the business is generating. In general, companies with stronger growth prospects and lower perceived risk justify higher PE ratios, while slower growing or riskier businesses typically trade on lower multiples.

Exxon Mobil currently trades on a PE of 16.15x, which is above the Oil and Gas industry average of about 12.77x but below the broader peer group average of 23.06x. To move beyond simple comparisons, Simply Wall St calculates a proprietary Fair Ratio, which estimates the PE Exxon Mobil should trade on given its earnings growth outlook, margins, size, industry and risk profile. This Fair Ratio for Exxon Mobil is 24.58x, implying that, after adjusting for these company specific factors, the stock arguably deserves a higher multiple than it currently commands. On this basis, Exxon Mobil appears undervalued relative to where its PE could reasonably trade.

Result: UNDERVALUED

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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 simple framework on Simply Wall St's Community page that lets you turn your view of Exxon Mobil into a story backed by numbers. You can spell out what you think will happen to its revenues, margins and cash flows, link that story to a financial forecast and a fair value, and then compare that fair value to today's share price to decide whether to buy, hold or sell.

Because Narratives on the platform are updated dynamically as new information like earnings, news or guidance arrives, they stay current and help you see how different perspectives can coexist. For example, one investor might see fair value at $132 per share based on a moderate energy cycle and balanced growth, while another might see $174 per share under a more optimistic long term production and margin outlook. This gives you a clear, real time sense of how your own thesis on Exxon Mobil compares with a wide range of live views in the market.

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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