Exxon Mobil's Value After Secret Talks with Rosneft: Undervalued or Overvalued?

Exxon Mobil's share price has risen 3.9% in the last week and 1.2% in the past month, with a 5.1% year-to-date gain and a 30.7% return over the past three years. The company's recent momentum follows secret talks with Rosneft regarding a potential return to the Sakhalin project. Exxon Mobil's valuation score is 4 out of 6, indicating it is undervalued. The Discounted Cash Flow (DCF) model estimates an intrinsic value of $244.28 per share, suggesting a 53.8% discount to the current market price.

Exxon Mobil Corporation (NYSE: XOM) has experienced a significant resurgence in its share price, with a 3.9% gain in the past week, a 1.2% increase over the past month, and a 5.1% year-to-date gain. Over the past three years, Exxon Mobil's stock has returned 30.7%, reflecting its strong fundamentals and technical set-up. The company's recent momentum follows secret talks with Rosneft regarding a potential return to the Sakhalin project [1].

Exxon Mobil's valuation score is 4 out of 6, indicating that it is undervalued. The Discounted Cash Flow (DCF) model estimates an intrinsic value of $244.28 per share, suggesting a 53.8% discount to the current market price. This valuation discrepancy suggests that investors may be underestimating the company's potential for future growth and profitability.

The company's recent earnings reports have been impressive. Exxon Mobil reported normalized earnings per share (EPS) of $1.64 for Q2 2025, beating consensus estimates by $0.08. Revenue for the quarter reached $81.51 billion, exceeding expectations by over $1 billion. These results demonstrate Exxon Mobil's operational excellence and ability to navigate volatile commodity prices and uncertain global economic conditions [1].

From a technical perspective, Exxon Mobil is trading within a critical triangle formation near all-time channel highs. The stock has been on a solid uptrend since October 2020, with its price moving from $30.11 to a recent all-time high of $126.34, representing a 300% appreciation. The triangle formation suggests that Exxon Mobil's stock could break out into the $170 area, representing a 55% upside from the current price levels [1].

Exxon Mobil's share repurchase program is also a significant driver of shareholder value. The company has committed to a total capital return of $20 billion annually through share repurchases in 2025 and 2026, with cash flow of $165 billion in surplus cash flow likely through 2030. This expansive capital return program signals management's optimism about the business and its determination to maximize shareholder value. Exxon Mobil has already repurchased about 40% of the shares it issued to acquire Pioneer Natural Resources since the acquisition closed in May 2024 [1].

In conclusion, Exxon Mobil's recent share price performance reflects its strong fundamentals, technical set-up, and robust share repurchase program. The company's undervaluation, as indicated by the DCF model, suggests that investors may be underestimating its potential for future growth and profitability. As Exxon Mobil continues to demonstrate operational excellence and navigate the energy transition, its stock may offer an attractive risk-reward proposition for investors.

References:
[1] https://seekingalpha.com/article/4816006-why-exxon-mobil-strong-fundamentals-technical-setup-compelling-buy