The sharp decline in oil prices since the summer of 2014 was a surprise to many investors and analysts alike, and there has been an incredible fallout within the energy sector. Looking ahead, most are expecting oil prices to remain subdued. Exxon Mobil Corp. (NYSE: XOM) has been under fire for this duration, but one analyst is taking a somewhat contrarian approach sees an inflection point for this stock.

Argus is upgrading Exxon to a Buy rating with a $104 price target, implying an upside of 16% from the current price level. Note that this price target is just $1 below the highest price target. This upgrade reflects Exxon’s diverse asset base, secure dividend, strong cost controls and favorable valuation relative to peers.

The firm also believes that Exxon is now less likely to dilute earnings with an expensive acquisition, as it did with XTO Energy in 2009, and that it will instead focus on leveraging its integrated business model and strengthening operational and financial execution.

Along with the upgrade, Argus raised its 2016 earnings per share (EPS) estimate to $2.50 from $2.47 to reflect the company’s first-quarter results, which beat its estimate by three cents. The firm is maintaining its 2017 estimate of $4.24, implying growth of 70% from the 2016 estimate. The consensus estimates from Thomson Reuters predict $2.60 and $4.35 in EPS for 2016 and 2017, respectively.

So far in 2016, Exxon is outperforming the broad markets, with the stock up about 17%. Over the past 52 weeks, the stock is up 7%.

Argus further commented in its report:

We forecast that West Texas Intermediate crude will average $40 per barrel in 2016, down from $50 in 2015 and well below the average of $93 in 2014 and $98 in 2013. Oil prices can be volatile, and we think they could range between $25 and $55 per barrel in 2016. We also recently lowered our 2016 forecast range for the wellhead price of Henry Hub natural gas to $2.00-$3.00 per mmBtu from $3.50.

Shares of Exxon traded at $89.81 midday Wednesday, with a consensus analyst price target of $84.93 and a 52-week trading range of $66.55 to $90.00.

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