ExxonMobil Holdings Corporation XOM has an integrated business model spanning upstream operations, refining and trading. Its upstream business is the largest contributor to earnings and is positioned to benefit from current crude oil prices. The West Texas Intermediate benchmark is hovering close to the $100 per barrel mark due to continued disruptions to shipping through the Strait of Hormuz, which have raised concerns about global crude supplies.
While XOM had previously cautioned that its Middle East production would be affected if the Strait of Hormuz remains closed for a full quarter, its longer-term production outlook remains bright. The company expects the share of production from its advantaged assets, which include the Permian Basin, Guyana and LNG, to continue growing. Under its 2030 plan, these assets are projected to represent roughly 65% of upstream production, up from 59% in the 2026 year-to-date period.
In addition, the refining environment remains constructive in the near term, which is expected to benefit its Energy Products segment. Refining markets have further tightened since the start of the conflict in the Middle East due to damage to refining infrastructure in the Middle East, attacks on Russian refining facilities and lower Chinese exports. In its latest earnings call, management stated that it expects elevated refining margins to persist, as market tightness is projected to take time to normalize even after the conflicts end. ExxonMobil intends to maximize throughput across its refining system to capitalize on these market conditions, which should help the company capture stronger refining margins.
Other Energy Sector Players That Can Benefit From the Current Environment
Par Pacific Holdings PARR operates an integrated downstream network spanning refining, logistics, retail and renewable fuels. The integrated platform covers the entire process, from sourcing crude to converting it into refined fuels and distributing the products through its retail and logistics channels. The downstream energy firm has a combined refining capacity of 219,000 barrels per day across Hawaii, Montana, Washington and Wyoming. This integrated setup provides the company with the operational flexibility to capitalize on favorable refining market conditions.
ConocoPhillips COP 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 generate handsome profits in a favorable commodity price environment.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 47.4% over the past year compared with the industry’s growth of 49.3%.
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From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.11X. This is above the broader industry average of 5.87X.
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The Zacks Consensus Estimate for XOM’s 2026 earnings hasn’t seen any revisions over the past seven days.
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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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