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ExxonMobil may be running out of steam, Bank of America says

A file photo of workers entering an Exxon Mobil refinery
Patrick T. Fallon | Bloomberg | Getty Images

ExxonMobil shares have outperformed many big energy "yield" names during oil's massive slide, but it might be time for investors to jump off the Dow component's bandwagon, Bank of America Merrill Lynch said Thursday.

The bank downgraded ExxonMobil's stock to neutral from buy and kept its price target unchanged at $96. Exxon's stock traded at $88.53 at Thursday's close.

"After strong relative performance and a valuation we estimate 'discounts' long-term oil at around $73, the shares have moved ahead of sector peers, reflecting perhaps a flight to XOM's defensive characteristics on the way down and relative scale that positions the stock as the 'go to' name for portfolio managers looking to reduce relative energy underweights as oil prices recover," BofA said in a note to clients Wednesday.

"While we acknowledge this momentum may continue, under our long-term price assumption of $80 (Brent), we believe fair value for XOM stands at $96, leaving just 8% upside potential from current levels," BofA said.

Entering Thursday trading, ExxonMobil shares had gained 14.5 percent in 2016 and 12.2 percent over the past six months.

XOM year-to-date chartSource: FactSet

Disclosure: BofA makes a market in ExxonMobil stock.