We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How XOM Navigates Business Uncertainty Better Than Many Peers
Read MoreHide Full Article
Key Takeaways
XOM's 15.44% debt-to-capitalization helps it operate smoothly when oil and gas prices fall.
Low leverage lets XOM borrow on favorable terms, pursue acquisitions and keep rewarding shareholders.
XOM is up 37.2% in a year; 9.97X EV/EBITDA and 2026 earnings estimates moved higher.
Exxon Mobil Corporation (XOM - Free Report) is an integrated energy giant, but generates the bulk of its earnings from the upstream operations. With a strong presence in the prolific Permian Basin and offshore Guyana resources, its top and bottom lines are highly vulnerable to fluctuations in oil and natural gas prices.
But investors should not worry much about this vulnerability since ExxonMobil has a strong balance sheet. With a debt-to-capitalization of 15.44%, the integrated energy giant has significantly lower exposure to debt capital. Thus, unlike many other energy companies, ExxonMobil can rely on its strong balance sheet when oil and natural gas prices turn low, and the business scenario becomes unfavorable.
With lower exposure to debt capital, XOM can secure additional debt on favorable terms during uncertain situations, allowing it to operate smoothly, pursue lucrative acquisitions and continue rewarding shareholders.
CVX & EOG Also Have Low Debt Load
Chevron Corporation (CVX - Free Report) and EOG Resources Inc. (EOG - Free Report) , both having robust balance sheets, can also sail through an unfavorable business environment due to their strong financials. While CVX has a debt-to-capitalization of 19.35%, EOG’s debt-to-capitalization stands at 20.42%.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 37.2% over the past year compared with the 35.3% improvement of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA of 9.97X. This is above the broader industry average of 6.40X.
The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
How XOM Navigates Business Uncertainty Better Than Many Peers
Key Takeaways
Exxon Mobil Corporation (XOM - Free Report) is an integrated energy giant, but generates the bulk of its earnings from the upstream operations. With a strong presence in the prolific Permian Basin and offshore Guyana resources, its top and bottom lines are highly vulnerable to fluctuations in oil and natural gas prices.
But investors should not worry much about this vulnerability since ExxonMobil has a strong balance sheet. With a debt-to-capitalization of 15.44%, the integrated energy giant has significantly lower exposure to debt capital. Thus, unlike many other energy companies, ExxonMobil can rely on its strong balance sheet when oil and natural gas prices turn low, and the business scenario becomes unfavorable.
With lower exposure to debt capital, XOM can secure additional debt on favorable terms during uncertain situations, allowing it to operate smoothly, pursue lucrative acquisitions and continue rewarding shareholders.
CVX & EOG Also Have Low Debt Load
Chevron Corporation (CVX - Free Report) and EOG Resources Inc. (EOG - Free Report) , both having robust balance sheets, can also sail through an unfavorable business environment due to their strong financials. While CVX has a debt-to-capitalization of 19.35%, EOG’s debt-to-capitalization stands at 20.42%.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 37.2% over the past year compared with the 35.3% improvement of the industry.
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA of 9.97X. This is above the broader industry average of 6.40X.
The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past 30 days.
ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.