24/7 Wall St 2007 Price Targets: Exxon, $75.

Over the next week 24/7 Wall St. will set mid-year price targets (June, 30, 2007) for the sixty most widely traded stocks. These targets will be based on past price performance, industry activity, forward projections of financial performance, outside analyst opinions, and research conducted for doing past articles on these firms. The price targets assume flat markets over the next six months. In other words, if the Nasdaq moved up 25% between now and mid-year, the target share price targets would probably be too low. If the market moved down by 20%, they would probably be too high.

Exxon Mobil. (XOM) Oil price drops have already caused Exxon to give back some of the gains  it amassed over the last year. The stock got as high as $79 in mid-December and since then has fallen to just above $70. At its high point, the shares were up 30% over the low for  previous twelve months. That increase now stands at 18%.

The bet on Exxon’s stock price is a bet on the price of oil. And, there seem to be more bets at $50 now than $100, although a few months ago no one had their money on the lower price. With Conoco forecasting a margin drop of 25% in Q4, investors in Big Oil are spooked.

While GM’s chief economist is predicting oil prices will see $40 this year, that is not likely. The demand for oil is likely to increase in huge markets like the US and China because they have expanding economies and have made no real moves to cut reliance on fossil fuels. The drop in demand in the US due to warm weather may help prices for a brief time, but put the emphasis on brief.

Oil is also the commodity of fear. Terrorist activity, pipeline breakdowns, tanker accidents, failure to add more nuclear energy production can all run oil prices up. So, the chances that the price of oil averages above $60 a barrel in 2007 is probably fairly good.

Exxon’s size also gives it economies of scale and its business diversity should help it earnings going forware. As Morningstar has pointed out compared to its smaller peers: "downstream refining, petrochemical, and lubricant operations make up a larger chunk of ExxonMobil’s business" The median price target for Exxon’s stock among 16 brokers covered by Thomson/First Call is $80 although the number of analysts the rate the stock a hold is rising.

Exxon’s stock may not be up another 30% in 2007, but it is not going down.

Factors that could move the stock price above target: The price of oil.

Factors that could move the shares below targer: The price of oil.

Douglas A. McIntyre can be reached at [email protected]. He does not write about securities in companies that he owns.