UBS: Exxon And Chevron Trading At Historically High Valuations

In a pair of recent reports, analysts at UBS gave their take on Exxon Mobil Corp

and Chevron Corp

following Exxon's recent analyst meeting. Overall, UBS remained neutral on both names. Exxon Exxon's recently-revealed capex budget for 2015 is about $34 billion, in line with expectations and longer-term guidance. The 2015 capex number represents about a 12 percent year-over-year (Y/Y) decline for the company. On the production front, Exxon disclosed a target of 4.1 MMBoed for 2015, in line with previous guidance and a 2.2 percent increase over 2014 production levels. The only change to the company's production outlook was a slight adjustment in the mix, favoring more liquids over gas. Analysts point out that Exxon's stock is currently trading at a premium to its historical valuation. Its relative price to earnings ratio (PE) of 1.0x versus the overall S&P is well above its historical 0.8x average. Analysts have a price target of $92 on Exxon's stock. Chevron Chevron's analysts day is coming up on March 10. Analysts predict that the company will maintain its current guidance, including a 16 percent Y/Y reduction in capex to about $31 billion. UBS is expecting Y/Y production growth of 0 to 3 percent and a long-term volume target of 3.1 MMBoed for Chevron. Chevron's stock is also currently trading at a premium to its historical valuation relative to the S&P. Chevron's relative PE of 0.93x is well above its historical average of 0.66x. Analysts have a price target of $108 on Chevron's stock.