October 13, 2008 / 3:28 PM / 11 years ago

UPDATE 1-RESEARCH ALERT-Goldman raises Exxon to buy

(Recasts; adds details)

Oct 13 (Reuters) - Goldman Sachs upgraded Exxon Mobil Corp (XOM.N) to “buy” from “neutral” and added Chevron Corp (CVX.N) to its conviction buy list, saying the companies have particularly strong balance sheets, sustainable cash flow and lower commodity price leverage.

Analyst Arjun Murti said valuation of both the companies were compelling, following the recent sell off in their shares.

“With a $30 billion positive net cash position and ability to continue to achieve industry-leading returns on capital, Exxon should represent one of the premier ‘safe-haven’ stocks in the broader market,” Murti said in a note to clients.

The analyst said Chevron is nearing the point at which exploration and production volumes are beginning to turn positive, which could be a key catalyst for the shares, and that the company offers an attractive cash flow yield.

Murti also downgraded Marathon Oil (MRO.N) and Murphy Oil (MUR.N) to “neutral” from “buy,” and added Petro-Canada PCA.TO to the Americas sell list. (Reporting by Aftab Ahmed in Bangalore; Editing by Amitha Rajan)

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