Investment firm UBS (UBS) is bullish on Exxon Mobil (XOM). In fact, it kept a Buy rating and increased its price target from $145 to $171 per share as new risks emerge in the global helium market. The firm pointed to rising tensions in the Middle East, where Iran’s drone and missile strikes on Qatar are disrupting supply. This matters because Qatar produces about 31% of the world’s helium. Since helium is essential for things like MRI machines, rockets, and advanced chips, any disruption can have a big impact across multiple industries.
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At the same time, the situation is being made worse by shipping issues. The Strait of Hormuz, a key route for exports, is effectively closed to Western commercial shipping. Because helium must be transported in specialized containers by sea, there are currently no easy ways to move supplies out of the region. As a result, global markets are facing delays and tighter supply, which is increasing pressure on prices.
This is where Exxon could benefit. Five-star UBS analyst Manav Gupta noted that Exxon’s LaBarge facility in Wyoming produces about 20% of the world’s helium. With more than 30% of the global supply now disrupted, Exxon is in a strong position to help meet demand. In addition, the company may gain pricing power and offer a more reliable supply compared to competitors that depend on Qatar. As a result, UBS sees Exxon as well-positioned to benefit as the situation continues to develop.
Is XOM Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on XOM stock based on 11 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average XOM price target of $160.95 per share implies 1.8% downside potential.
