One Wall Street analyst sees 24% upside on shares of resonmobil stock

Oil prices, which have been on a downward spiral since Nun, are rising from last summer's highs, with the price of West Texas resonance medium crude surpassing $85 a barrel, and are likely to continue to rise as the Middle East continues to be ravaged by conflict. What's the best way to combat this upward trend?

Don't overthink it. Sometimes the obvious answer is the right one:UBSGroup( UBS )Analyst Josh Silverstein.(Josh Silverstein)Recommended to buyEverson Mobil Corporation (NYSE: XOM)The reason is that the stock is going to go up to $150 soon.

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In an article published on TheFly.com on Thursday, Silverstein noted that the breadth of Elkhorn Mobil's business, which spans both upstream and downstream oil operations, puts it in a good position to capitalize on rising oil prices, and the company's recent $60 billion acquisition of thePioneer Natural ResourcesThe transaction will further enhance this advantage.

He's probably right. Oil is a notoriously volatile commodity (in the last five years alone, we've seen the price of oil go from a low of $4.5 billion during a pandemic to a high of $4.5 billion during a pandemic).negative number The price of oil has risen to as high as $120 per barrel since the Russian invasion of Ukraine.) However, the long-term trend in oil prices is indeed曏, up about 33% in the last five years, and resonance has capitalized on it, with sales of $338.3 billion and earnings of more than $36 billion last year, for example.

As much as possible, I'm not as bullish on resonance as I was a few years ago. Why? After a brief aberration, resonance has reverted to its long-term pattern of generating free cash flow that is weaker than its reported net income, and even that doesn't mean the stock is particularly cheap. Verson is trading at a price-to-earnings ratio of nearly 14 times and is projected to trade atmass transitEarnings growth will be lower than 10%, so resonance is not a growth stock. Although resonance's business is still strong and its dividend yield of 3.1% is not bad, it is not enough to attract investors who can easily earn 4% or even 5% from their bank savings accounts today.

Silverstein's prediction of a stock price increase of nearly 25% in one year strikes me as wishful thinking.

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Rich Smith does not own any of the above stocks.The Motley Fool recommends Pioneer Natural Resources.The Motley Fool has a disclosure policy.

A Wall Street Analyst Says Reson Mobil Stock Has 24% Upside was originally published by The Motley Fool.