The Morning Trade

JP Morgan says to buy Exxon stock for the first time in 7 years. Also, Apple always.
Gregory BergmanJan 13,2021,15:18

Analysts at JP Morgan on Wednesday raised their rating on shares of Exxon Mobil (NYSE: XOM) to "overweight" in the bank's first “buy” recommendation on the company in seven years. Capital spending cuts, the bank says, have put the struggling oil stock back on the road to recovery. While you will not see the kinds of gains in beaten-up value stocks like Exxon as you have and will from renewable energy stocks (I like Ballard Systems -BLDP-Nasdaq) in the hydrogen space, a space expected to explode in 2021.

But value stocks are called value stocks for a reason, and, while companies like Exxon might not generate returns like Plug Power or Nio or Tesla, there are a number of undervalued companies in this Old World stock value group; Exxon is one of them.

(I recommended Exxon back in October in my weekly brief-
In a note to clients, JP Morgan's Phil Gresh said he had confidence in Exxon’s ability to deliver on earnings after many earnings day disappointments in recent years. Gresh raised his price target for the stock from $50 to $56, above Tuesday’s closing price of $47.87 per share.

The stock climbed 1.3% in premarket trading and was up over 1% on the day at the open. The stock has climbed 16.2% over the past seven sessions.

“For the first time in seven years of covering integrated oils since the peak of the sector in 2014, we are upgrading [Exxon Mobil] to overweight,” Gresh said.
This comes after late last year when, in a significant albeit mostly symbolic blow to the iconic Aemrican company, it was bounced from the blue-chip Dow Jones Industrials Index.

Buy Apple, Always

I've always been long on Apple (Nasdaq: AAPL), and while analysts differ on the 12-month price forecast from a low of $75 per share to a high of $160 per share with the average price target at $132.32, I am going to bet on the higher range of the forecast, particuarly after Wells Fargo's recent increase of its Apple target from $140 to $155 per share.

Wells Fargo analyst Aaron Rakers is also maintaining an “overweight” rating on Apple shares. Part of Rakers' rationale for the uprgade was data he cited from The China Academy of Information & Communications Technology which showed strong iPhone 12 sales.

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Topics:oil, gas, Exxon, Apple