What Lies Ahead for ExxonMobil Amid Surging Crude Prices?
Exxon Mobil Corporation XOM is a leading oil and gas company with a global presence and a portfolio of high-quality assets that support its earnings and profitability. The company is expected to benefit from the sharp surge in oil prices due to escalating geopolitical tensions in the Middle East. The conflict between the United States and Iran in the Middle East has caused supply disruptions and pushed the benchmark Brent crude price above $100 per barrel.
While this conflict has raised energy shortage concerns for the global economy, the rise in oil prices is expected to benefit exploration and production players like ExxonMobilXOM--. The company continues to expand upstream production from its low-cost, high-return assets, which include Guyana and the Permian. ExxonMobil has projected its upstream production to reach approximately 4.9 million barrels of oil equivalent per day in 2026 and nearly 5.5 million barrels of oil equivalent per day by 2030. Increasing production from its advantaged assets with low-breakeven costs in a favorable commodity price environment will enable the company to raise its earnings and profitability.
ExxonMobil maintains a strong balance sheet that enables it to sail through volatile business cycles with ease. XOMXOM-- has a debt-to-capitalization ratio of 11.38%, which is significantly lower than the industry average. Its strong financial position enables XOM to navigate market cycles and continue investing in its growth.
Other Industry Majors With a Low-Cost Production Profile
ConocoPhillips COP and EOG Resources, Inc. EOG are two other energy firms that boast a low-cost resource base in the shale basins of the United States.
ConocoPhillips is involved in the exploration and production of crude oil, natural gas liquids (NGLs), bitumen and natural gas. The company boasts a strong asset base in the shale basins of the United States, including the Delaware Basin, Midland Basin, Eagle Ford and Bakken shale. These assets support low-cost production, which enables ConocoPhillips to maintain its profitability and generate free cash flow even during periods of low oil prices.
EOG Resources is a leading independent exploration and production company with operations focused on the prolific acres in the United States, as well as several resource-rich international basins. EOG boasts a high-return, low-decline asset base and stands out among the low-cost producers in the United States. The company’s focus on maintaining a resilient balance sheet and lowering production costs should enable it to weather oil price volatility.
XOM’s Price Performance, Valuation & Estimates
Shares of ExxonMobil have risen 44.4% over the past year compared with the 35.5% improvement 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 10.64X. This is above the broader industry average of 6.71X.
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The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past seven days.
Image Source: Zacks Investment Research
XOM, COP and EOG each currently carry 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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Exxon Mobil Corporation (XOM): Free Stock Analysis Report
ConocoPhillips (COP): Free Stock Analysis Report
EOG Resources, Inc. (EOG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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