RBC Capital Markets downgraded Exxon Mobil Corp. (NYSE:XOM), saying their exposure to the weak natural gas market makes them vulnerable.
This was a reference to the acquisition of XTO Energy in the early part of 2010, which resulted in Exxon becoming the largest natural gas company in the United States.
Natural gas companies have been attempting to diversify by acquiring oil assets because of the expectations the abundant supply of natural gas will keep the price of the energy source down.
RBC said the weak price of natural gas will damage the earnings of Exxon, along with their market valuation. They lowered the price target for the next 12 months from $76 a share to $70 a share, while downgrading them from "Outperform" to "Sector Perform."
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