XOM - Why Exxon Mobil Is A Buy Despite Mixed Earnings

• XOM has had its most challenging year ever; we think that economic indicators and trends in commodities suggest these doldrums are ending.
• Exxon's $19 billion write-down was actually part of a strategic shift in its upstream strategy that will ultimately benefit shareholders.
• Exxon's investment in downstream should pay off over the coming quarters. We show what even a small surprise in downside margins could mean for price.
• Peak oil is ahead of us, political risk is relatively low, and the robust cyclical recovery will cause XOM to outperform.
• We discuss the risks to our thesis materializing.

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