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ExxonMobil Before Q2 Earnings: Time to Hold the Stock or Reassess?
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Key Takeaways
ExxonMobil expects Q2 earnings of $1.49 per share, down 30.4% year over year on lower commodity prices.
Weaker oil and gas prices may cut XOMs upstream profit by up to $1.9 billion versus the previous quarter.
XOM trades at a premium EV/EBITDA of 6.90, above the industry average of 4.35, despite underperforming peers.
Exxon Mobil Corporation (XOM - Free Report) is set to report second-quarter 2025 results on Aug. 1, 2025, before the opening bell.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.49 per share, implying a decline of 30.4% from the year-ago reported number. It witnessed five upward revisions in the past 30 days. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $82.8 billion, suggesting a 11% decline from the year-ago actuals.
Image Source: Zacks Investment Research
XOM beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 3.58%. This is depicted in the graph below:
Q2 Earnings Whispers for XOM
Our proven model doesn’t predict an earnings beat for XOM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
XOM’s Factors to Note
ExxonMobil recently disclosed in an 8-K filing that it expects earnings for the second quarter to be hurt sequentially by lower oil and natural gas prices. With exploration and production activities contributing mostly to XOM’s bottom line, a weaker commodity pricing environment in the June quarter of this year is a concern.
According to the U.S. Energy Information Administration (“EIA”), the average spot prices for Cushing, OK, West Texas Intermediate (WTI) crude for April, May and June were $63.54, $62.17 and $68.17 per barrel, respectively. Based on the EIA data, the pricing environment was healthier in the first quarter, with average prices of $75.74, $71.53 and $68.24 per barrel for January, February and March, respectively. The same story also applies to natural gas prices.
Softer commodity prices are expected to hurt XOM’s upstream business, as the energy giant forecasts that lower oil prices will sequentially decrease its upstream earnings by $800 million to $1.2 billion. A change in gas prices will reduce its upstream profit by $300 million to $700 million. Thus, it can be assumed that ExxonMobil’s second-quarter results are going to take a hit.
XOM’s Price Performance & Valuation
XOM's stock has slipped 2.4% over the past year compared with the industry’s marginal growth of 0.5%. BP plc (BP - Free Report) , another integrated energy major, has fallen 0.3% over the same time frame, while Chevron Corporation (CVX - Free Report) , in the same space, has jumped 2.4%.
One-Year Price Chart
Image Source: Zacks Investment Research
Despite ExxonMobil’s price being lower than BP, Chevron and the broader industry, XOM still appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) ratio is 6.90, reflecting that it is trading at a premium compared to the industry average of 4.35.
Image Source: Zacks Investment Research
Investment Thesis of XOM
The acquisition of Pioneer Natural Resources boosts ExxonMobil's production capabilities in the Permian Basin, one of the most profitable regions in the United States due to its exceptionally low production costs. The integrated energy major also has a strong pipeline of projects encompassing offshore Guyana assets, which are also known for low-cost structures.
XOM is well known for better utilization of invested funds and has a strong balance sheet. Hence, the energy major can rely on its solid financials to sail through an unfavorable business environment. Also, investing in alternative energy, such as carbon capture and lithium battery technology, offers potential growth opportunities for ExxonMobil. However, these projects require substantial capital and carry uncertain returns in the short term. Moreover, the company’s business is highly exposed to volatile oil and natural gas prices.
Status of Other Big Energy Players: CVX, BP
Like XOM, Chevron will also report second-quarter 2025 earnings on Aug. 1, 2025. CVX currently has an Earnings ESP of +3.63% and a Zacks Rank of 3.
Chevron's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, and missed the same twice, with the average negative surprise being 3.60%.
BP, on the other hand, will report results on Aug. 5. BP currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.
BP's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, and missed the same twice, with the average negative surprise being 2.92%.
Last Word
Considering the backdrop, it might be wise for investors to wait for a more favorable entry point, as the company is currently somewhat overvalued. Those who own XOM stock may hold on to it to benefit from ExxonMobil's long-term growth prospects.
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ExxonMobil Before Q2 Earnings: Time to Hold the Stock or Reassess?
Key Takeaways
Exxon Mobil Corporation (XOM - Free Report) is set to report second-quarter 2025 results on Aug. 1, 2025, before the opening bell.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.49 per share, implying a decline of 30.4% from the year-ago reported number. It witnessed five upward revisions in the past 30 days. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $82.8 billion, suggesting a 11% decline from the year-ago actuals.
XOM beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 3.58%. This is depicted in the graph below:
Q2 Earnings Whispers for XOM
Our proven model doesn’t predict an earnings beat for XOM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
The leading integrated energy player has an Earnings ESP of 0.00%. XOM currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
XOM’s Factors to Note
ExxonMobil recently disclosed in an 8-K filing that it expects earnings for the second quarter to be hurt sequentially by lower oil and natural gas prices. With exploration and production activities contributing mostly to XOM’s bottom line, a weaker commodity pricing environment in the June quarter of this year is a concern.
According to the U.S. Energy Information Administration (“EIA”), the average spot prices for Cushing, OK, West Texas Intermediate (WTI) crude for April, May and June were $63.54, $62.17 and $68.17 per barrel, respectively. Based on the EIA data, the pricing environment was healthier in the first quarter, with average prices of $75.74, $71.53 and $68.24 per barrel for January, February and March, respectively. The same story also applies to natural gas prices.
Softer commodity prices are expected to hurt XOM’s upstream business, as the energy giant forecasts that lower oil prices will sequentially decrease its upstream earnings by $800 million to $1.2 billion. A change in gas prices will reduce its upstream profit by $300 million to $700 million. Thus, it can be assumed that ExxonMobil’s second-quarter results are going to take a hit.
XOM’s Price Performance & Valuation
XOM's stock has slipped 2.4% over the past year compared with the industry’s marginal growth of 0.5%. BP plc (BP - Free Report) , another integrated energy major, has fallen 0.3% over the same time frame, while Chevron Corporation (CVX - Free Report) , in the same space, has jumped 2.4%.
One-Year Price Chart
Despite ExxonMobil’s price being lower than BP, Chevron and the broader industry, XOM still appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) ratio is 6.90, reflecting that it is trading at a premium compared to the industry average of 4.35.
Investment Thesis of XOM
The acquisition of Pioneer Natural Resources boosts ExxonMobil's production capabilities in the Permian Basin, one of the most profitable regions in the United States due to its exceptionally low production costs. The integrated energy major also has a strong pipeline of projects encompassing offshore Guyana assets, which are also known for low-cost structures.
XOM is well known for better utilization of invested funds and has a strong balance sheet. Hence, the energy major can rely on its solid financials to sail through an unfavorable business environment. Also, investing in alternative energy, such as carbon capture and lithium battery technology, offers potential growth opportunities for ExxonMobil. However, these projects require substantial capital and carry uncertain returns in the short term. Moreover, the company’s business is highly exposed to volatile oil and natural gas prices.
Status of Other Big Energy Players: CVX, BP
Like XOM, Chevron will also report second-quarter 2025 earnings on Aug. 1, 2025. CVX currently has an Earnings ESP of +3.63% and a Zacks Rank of 3.
Chevron's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, and missed the same twice, with the average negative surprise being 3.60%.
BP, on the other hand, will report results on Aug. 5. BP currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.
BP's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, and missed the same twice, with the average negative surprise being 2.92%.
Last Word
Considering the backdrop, it might be wise for investors to wait for a more favorable entry point, as the company is currently somewhat overvalued. Those who own XOM stock may hold on to it to benefit from ExxonMobil's long-term growth prospects.