Imperial Oil (IMO) has solid fundamentals, but its stock appears overvalued compared with peers, RBC Dominion Securities said in a note Monday.

Analysts, including Greg Pardy, said they remain positive on the company's strong leadership team, long-life upstream assets, diversified cash flow from refining and chemicals, solid balance sheet, free cash flow, and commitment to shareholder returns.

"That said, the relative outperformance and valuation of Imperial Oil's common shares appear to have disconnected from its fundamentals," analysts said.

Based on futures pricing, Imperial Oil is trading at a 2026 estimated debt-adjusted cash flow multiple of 12.9 times, compared with 11.2 times for Exxon Mobil (XOM) and an average of 8.6 times for their North American major peer group, according to the note.

RBC downgraded Imperial Oil to underperform from sector perform, with a price target of 116 Canadian dollars ($84.75).

Price: 118.88, Change: -1.81, Percent Change: -1.50