Getty Images Over the past three months, the stock has climbed 12.6%, while continuous crude oil futures CL00, +0.91% have gained 2.1% and the S&P 500 index SPX, -1.70% has advanced 6.7%.
Truist’s Dingmann upgraded Exxon Mobil to hold after cutting it to sell about two months ago. He raised his stock price target to $65 from $50.
“Based on our updated forecasts and recent company conversations, we are more confident in [Exxon Mobil’s] shareholder return strategy while simultaneously paying down debt,” Dingmann wrote in a note to clients. “We anticipate further potential dividend increases coupled with share repurchases while not making the plan too formulaic.”
In the third quarter, the company distributed $11.2 billion in dividends — 88 cents a share — to shareholders, but did not repurchase any shares. The company said in October that it expects a share repurchase program of up to $10 billion over 12 to 24 months, starting in 2022.
The implied dividend yield for Exxon Mobil’s stock is currently 5.15%, compared with the yield for the SPDR Energy Select Sector exchange-traded fund XLE, -0.39% of 3.86% and the implied yield for the S&P 500 of 1.32%.
Dingmann said he’s also “more positive” on the company’s overall capital plan. Although that plan incorporates traditional and lower-emission investments, he said the plan continues to be largely returns driven.
When Dingmann downgraded the stock to sell on Nov. 2, he cited relative valuation, as his forecasts suggested Exxon Mobil’s shareholder returns could be less per share than its peers while the stock traded at a more than 10% premium. The stock had closed Nov. 1 at $65.63.
Since then, the stock has gained4.1%, while shares of what Dingmann said is the company’s “most relevant” peer, Chevron Corp. CVX, -0.54% , have rallied 7.6%.
Over the past year, Exxon Mobil shares have hiked up 52.0% while the energy sector ETF has rallied 45.9% and the S&P 500 has gained 23.5%.