Is ExxonMobil Poised to Gain From Current Elevation in Crude Prices?
Exxon Mobil Corporation XOM operates across the entire energy chain, from crude oil production to refining into finished products.The business model ofXOM is highly exposed to crude price volatility since it generates a significant portion of revenues from upstream operations. With West Texas Intermediate crude prices trading around $90 per barrel, ExxonMobilXOM-- is currently operating in a favorable business environment.
Investors should know that the majority of the well-known integrated giant ExxonMobil’s upstream assets are spread across the Permian Basin, the most prolific basin in the United States and offshore Guyana. These advantaged assets have relatively low production costs, meaning XOMXOM-- can generate strong margins when crude prices remain soft. With crude prices currently elevated, XOM stands to benefit significantly from its advantaged asset portfolio.
Elevated crude prices will enable ExxonMobil to generate increased cash flow. The additional cash can be utilized to fund ongoing development projects and expand production capacity. Higher earnings will support the energy giant strengthen its balance sheet while continuing disciplined capital spending.
CVX & COPCOP-- Are Poised to Benefit From Higher Crude Prices
Chevron Corporation CVX and ConocoPhillips’COP business models are highly vulnerable to crude price volatility as they also have strong presence in the exploration and production operations. With high-quality assets spread across multiple regions, CVXCVX-- maintains a notable presence in the Permian Basin. COP also has presence in the Lower 48 region, which includes the Permian Basin. CVX and COP, by virtue of their business models, benefit from elevated crude prices, as well as their presence in the Permian Basin.
XOM’s Price Performance, Valuation & Estimates
XOM shares have gained 34.6% over the past year compared with the 31.2% return of the composite stocks belonging to the industry.
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From a valuation standpoint, XOM trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 9.7X. This is above the broader industry average of 6.08X.
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The Zacks Consensus Estimate for the first quarter of 2026 has seen a downward revision over the past seven days. Meanwhile, for the second quarter and 2026, XOM’s earnings estimates have been unchanged.
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ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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