• Investors may be wondering whether Exxon Mobil at US$163.91 is still offering value after a strong run, or if they might be late to the story.
• The stock has seen a 3.4% decline over the last 7 days, alongside returns of 8.4% over 30 days, 33.6% year to date and 68.2% over the past year. The 3-year return is 57.4%, and the 5-year return is roughly 2.5x.
• Recent coverage around Exxon Mobil has focused on its scale, its portfolio of energy assets and its role in the broader sector. These factors help frame how investors think about future cash flows and risk, and they can influence how quickly sentiment shifts when the share price moves this fast.
• Exxon Mobil currently has a valuation score of 4 out of 6. Below, you will see how different valuation methods compare, followed by a section that outlines a more complete way to think about value.

Approach 1: Exxon Mobil Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of a company’s future cash flows and then discounts them back to today’s value to arrive at an estimate of what the business might be worth per share.

For Exxon Mobil, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $27.8b. Analyst inputs and Simply Wall St extrapolations project free cash flow reaching $40.7b by 2030, with a detailed path of ten year projections that are discounted back to today using the model’s assumptions.

Bringing all those projected cash flows back to the present produces an estimated intrinsic value of about $242.67 per share. Compared to the current share price of US$163.91, this implies the shares trade at roughly a 32.5% discount to the DCF estimate, which indicates that the stock screens as undervalued on this model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Exxon Mobil is undervalued by 32.5%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.

Approach 2: Exxon Mobil Price vs Earnings

For a profitable company like Exxon Mobil, the P/E ratio is a useful way to gauge what investors are currently paying for each dollar of earnings. It reflects how the market weighs the company’s earnings power relative to other opportunities.

In general, higher growth expectations and lower perceived risk can justify a higher P/E ratio, while slower growth and higher risk usually align with a lower one. Exxon Mobil’s current P/E is 23.68x, compared with the Oil and Gas industry average of 15.56x and a peer group average of 28.66x. This places the stock above the sector overall, but below the immediate peer set used here.

Simply Wall St’s Fair Ratio for Exxon Mobil is 30.57x. This is a proprietary estimate of what the P/E might be, given factors such as earnings growth, industry, profit margins, market cap and key risks. Because it adjusts for these company specific drivers, it can give a more tailored reference point than simple comparisons with peers or the broad industry. With the current P/E at 23.68x versus the Fair Ratio of 30.57x, the shares are identified as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Exxon Mobil Narrative

Earlier it was mentioned that there is an even better way to understand valuation, and on Simply Wall St that comes through Narratives, where you choose a story for Exxon Mobil that connects your view of its business to a set of numbers, then to a Fair Value that you can compare with the current price to decide whether the stock looks expensive or cheap for your goals.

A Narrative is simply your version of Exxon Mobil’s future, written in plain language but grounded in assumptions for revenue, earnings, margins and a Fair Value per share, so that you are not just reacting to headlines or one model in isolation.

On Simply Wall St’s Community page, investors use Narratives as a simple tool, available to anyone, to turn that story into a forecast and Fair Value. The platform keeps those Narratives updated when new information such as news, earnings or analyst estimates arrives, so your view does not go stale.

For Exxon Mobil, one investor on the bullish end currently anchors on a Fair Value of about $195 per share, while a more cautious investor uses around $78. Both Narratives sit side by side on the platform, so you can see how different assumptions about projects like Guyana, the Permian or low carbon solutions lead to very different Fair Values from the same current share price of US$163.91.

For Exxon Mobil however we will make it really easy for you with previews of two leading Exxon Mobil Narratives:

Fair value in this bullish Narrative: US$174.00 per share

Implied discount to this fair value: around 5.8% using the Narrative fair value and the latest close of US$163.91

Revenue growth assumption: 12.97%

• An investor called Agricola focuses heavily on the Guyana Stabroek Block, treating Exxon Mobil’s low cost barrels and growing production there as a key support for long term cash flows.
• The Narrative leans on Exxon Mobil’s integrated model, Guyana and Permian volumes, a sizable buyback program and dividends to support the case for the shares trading below that investor’s fair value range.
• Risks such as oil price swings, project timing, inflation and policy changes in Guyana are acknowledged, but the author still views Exxon Mobil as a company that can be held with relatively high confidence over several years.

Fair value in this more cautious Narrative: US$126.39 per share

Implied premium to this fair value: around 29.6% using the Narrative fair value and the latest close of US$163.91

Revenue growth assumption: 2.94%

• This Narrative, authored by Richard Bowman, assumes Exxon Mobil keeps production broadly flat while concentrating on higher margin, lower cost assets like Guyana and the Permian Basin.
• It expects buybacks and efficiency gains to do most of the work for earnings per share, with only modest top line growth and a P/E that settles around 14x as margins stabilise.
• The key watchpoints are reserve replacement, the scale and timing of any move into renewables, and the risk that OPEC or other producers change course in a way that puts pressure on crude prices and earnings.

If you want to go beyond these previews and see how other investors connect the same facts to very different outcomes, you can read the full Narratives for Exxon Mobil on Simply Wall St, compare their fair values side by side with the current price and decide which story, if any, feels closest to your own view of the stock.

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Exxon Mobil on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Do you think there's more to the story for Exxon Mobil? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.