Truist upgrades Exxon Mobil, cites long-term benefits from Pioneer acquisition
Summary
"While we forecast moderate near-term incremental earnings/cash flow from Exxon acquiring Pioneer (PXD, Hold), we anticipate more pronounced longer-term benefits in 25+ given the notably more productive proforma US inventory," he wrote. Exxon Mobil announced Wednesday that it agreed to buy Pioneer Natural Resources at $253 per share in an all-stock deal, or $59.5 billion. The deal, which will mark Exxons largest acquisition since buying Mobil more than two decades ago, is expected to close in the first half of 2024. Shares have pulled back more than 9% since the start of October, as oil prices declined after hitting their highest levels in over a year last month. "While labor and various other costs remain challenging, XOM will have the benefit of running by far the largest US operation resulting in [oilfield equipment and services] concessions many other [exploration and production companies] will not be privy to," he said.