Jefferies Initiates Coverage Of ExxonMobil With A Hold Rating; $75 PT Set

Jefferies is initiating coverage of ExxonMobil (NYSE: XOM) with a Hold rating and a $75 PT.

“As we lay out in our overview of the global majors, we believe the severe discount which is now applied to these companies of some 25% on a relative PER basis, should begin to ease as the companies begin to offer better growth prospects and resource capture than has been the stockmarket's perception in recent years,” Jefferies writes.

“In our view ExxonMobil is not the best example of this, as we believe it is lagging the peer group on organic growth and its XTO acquisition should mean lower realizations in its natural gas business.”

Jefferies said that the key risk to its thesis remains the outlook for US natural gas prices, “where we have a gloomy outlook in the near-term timeframe.”

ExxonMobil currently trades at $72.13.