Barclays Capital lowered its rating on Exxon Mobil, the largest U.S. oil company, today to ''market perform'' from ''outperform.'' Analyst Paul Cheng said there are better valuation stories among integrated oil names and that XTO's fourth-quarter performance may not show the improvement investors are hoping for.
Exxon Mobil (XOM) acquired XTO last year to become the largest U.S. natural gas producers, but natural gas prices have lagged. The performance of Exxon's stock trailed rivals last year, but even with that, Cheng does not anticipate a big pop in Exxon's stock this year.
Cheng raised his price target on the shares by $4 to $85 due to rising oil prices, but increased his price targets more substantially for Exxon rivals while noting those firms would benefit more from rising oil prices, Barron's reported.
The analyst said Chevron (CVX), the second-largest U.S. oil company, could outperform Exxon and ConocoPhillips (COP), the third-largest U.S. oil company. Barclays favors Hess (HES) and Imperial Oil (IMO) among integrated oil stocks.