Exxon Mobil shares drop 3.44% on Freedom Capital downgrade to Sell

Exxon Mobil’s shares fell 3.4381% in pre-market trading on January 7, 2026, signaling investor caution ahead of the earnings season.

Freedom Capital Markets downgraded the oil giant from Hold to Sell, setting a price target of $123.00. The move followed concerns over a “negative fundamental backdrop” in the sector, including declining WTI crude prices and oversupply conditions. The firm highlighted a 9% quarterly drop in average oil prices during Q4 2025 and weaker refined product prices as risks to earnings, warning that market imbalances could persist through mid-2026.

Analysts noted growing skepticism amid a recent rally in U.S. energy stocks, which Freedom Capital described as “unjustified.” The downgrade aligns with broader caution, as major institutional holders like Vanguard and JPMorgan reduced their XOM allocations in recent filings. Meanwhile, conflicting signals from other firms—such as Bernstein’s $137 target and Mizuho’s $132 target—highlight diverging views on the stock’s near-term trajectory.

With earnings reports expected to reflect ongoing sector challenges, the sell-off underscores heightened sensitivity to macroeconomic pressures and supply-demand dynamics in the energy market.