Bank of America has raised its rating on ExxonMobil shares to Buy from Neutral while maintaining a $154 price target, arguing that the stock’s decline from recent peaks has created what it views as an attractive valuation even if a negotiated peace between the U.S. and Iran comes to pass.
Exxon’s shares climbed to about $147 in late 2025 and early 2026, at a time when the market appeared to be pricing in a long-term oil price near $70 per barrel. After the Iran conflict began, the stock reached an all-time high of $171 before pulling back. At roughly $141 on Monday, Bank of America calculates the stock now reflects a long-term Brent assumption closer to $65 a barrel.
Analysts led by Jean Ann Salisbury said they see "low fundamental downside from here," describing the current position as "a free call option" if the prospective peace deal does not occur and oil returns to higher levels.
Bank of America highlighted several elements that could support Exxon in a post-conflict or persistent-tension scenario. Roughly 20% of Exxon’s production originates in the Middle East and much of that output is presently shut in. BofA estimates resumption of that production could boost Exxon’s annualized free cash flow by about $3.3 billion assuming a $70 Brent price.
The analysts also underscored the strategic value of Exxon’s integrated business model in the face of expected price volatility. They noted the company could gain from potential reopening of Guyana acreage that depends on Venezuela’s political developments, and from improved negotiating leverage with Qatar and other Gulf producers as those countries consider expanding development.
On the broader oil outlook, BofA’s team said it is "hard to see oil price falling below $70/bbl in the medium term as 1 billion barrels+ must be replaced and more countries likely add strategic petroleum reserves (SPRs)." They did flag that supply growth associated directly or indirectly with Iran could exert downward pressure on prices later in the decade, but added any such effect is more likely to appear later in the decade rather than in the near term.
BofA also pointed to Exxon’s U.S. operations, noting that the company has raised its Permian production guidance for 2030 to 2.5 million barrels of oil equivalent per day from a prior 2.3 million barrels of oil equivalent per day, and that this projection was achieved without increasing capital spending.
Contextual note: The bank’s upgrade rests on the combination of a lower valuation today, a view of limited downside under its assumptions, and optionality should oil prices move higher again depending on geopolitical developments and supply dynamics.