ExxonMobil Corporation XOM, the U.S. oil and gas giant, has an integrated business model spanning upstream operations, refining and trading. Since it derives the majority of its earnings from its upstream business, ExxonMobil continues to focus on its advantaged assets to grow its production and support earnings.
A key component of its advantaged assets includes its liquefied natural gas (LNG) portfolio. ExxonMobil is working to expand its LNG portfolio, which includes the Golden Pass LNG project in Sabine Pass, TX, a joint venture between ExxonMobil and QatarEnergy. On its first-quarter earnings call, the company noted that Train 1 at the Golden Pass LNG facility in Sabine Pass, TX, had achieved its first LNG production. It loaded its first export cargo from the LNG terminal in the second quarter of this year.
XOM has highlighted that the first train is expected to raise U.S. LNG exports by about 5% relative to 2025. Once all three trains come online, the facility is expected to increase the country's LNG export capacity by roughly 15%. Beyond Golden Pass, ExxonMobil is progressing LNG developments in Papua New Guinea and Mozambique, with final investment decisions expected in the near term. These projects will enable the company to diversify its sources of supply and strengthen its global LNG network.
In the long term, this should allow XOM to capitalize on the robust demand for LNG, driven by heightened energy security concerns and the expansion of data center infrastructure, while generating higher cash flows.
Other Energy Sector Players Banking on Growing LNG Demand
ConocoPhillips COP and Venture Global, Inc. VG are two global energy firms that can benefit from the rise in global demand for LNG.
One of the key growth drivers of COP’s LNG strategy is the Port Arthur LNG project, which is progressing steadily and is on track to deliver its first LNG in 2027. It is also focused on expanding its international LNG footprint through its Equatorial Guinea LNG operations. COP’s LNG strategy is expected to become a free cash flow growth engine, supported by rising global demand, strategic geographic positioning of its assets and energy security concerns across the globe.
Venture Global is one of the largest U.S.-based exporters of LNG and is currently operating and developing multiple LNG export projects in Louisiana. The company anticipates that the total production capacity across its projects will total approximately 68 million tons per annum, upon completion, with potential upside from optimization initiatives. Being an LNG export company, VG is expected to benefit from the rise in LNG demand, driven by the expansion of data centers, replacement of coal and the global shift toward lower-emission fuels.
XOM’s Price Performance, Valuation & Estimates
Shares of ExxonMobil have risen 39.7% over the past six months compared with the 38% gain 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 9.67X. This is above the broader industry average of 6.34X.
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The Zacks Consensus Estimate for XOM’s 2026 earnings has seen downward revisions over the past seven days.
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XOM 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).