UPDATE: Goldman Sachs Downgrades Exxon Mobil to Sell, Lowers Price Target to $59 Notes 6 Reasons:

1. we see the company’s 2025 15% ROCE target as tough to achieve on a combination of our lower commodity price view and the high capital intensity of the business 2. we see downstream and natural

Benzinga · 02/03/2020 15:45

1. we see the company’s 2025 15% ROCE target as tough to achieve on a combination of our lower commodity price view and the high capital intensity of the business

2. we see downstream and natural gas prices pressuring medium-term earnings power

3. we believe the reinvestment rate is high, limiting room to return incremental capital beyond the dividend

4. Shares trade at a significant premium relative to global peers, as shown in the chart below

5. While Exxon has been executing asset sales ahead of plan, the company is monetizing assets at valuation levels below where the stock is currently trading, implying dilution

6. while Exxon has a solid production profile (led by Guyana, Permian), we see this as well reflected in the valuation and the company has acknowledged operational challenges in the Permian