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Should You Buy ExxonMobil Stock Despite Its Q2 Earnings Miss?
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Key Takeaways
ExxonMobil's Q2 EPS missed estimates, while revenue rose and topped expectations.
High oil prices and low-cost Permian and Guyana assets support ExxonMobil's upstream outlook.
XOM has gained 44.6% in a year, but its premium valuation argues against buying now.
Last Friday, ExxonMobil Holdings Corporation (XOM - Free Report) announced second-quarter 2026 earnings that missed expectations owing to the conflicts in the Middle East that hurt oil and gas production. However, non-Middle East upstream production achieved its strongest levels in more than two decades.
Thus, it is clear that despite the earnings shortfall, ExxonMobil’s core businesses continue to show considerable strength. Also, considering the solid crude pricing environment, the integrated energy giant’s overall business outlook remains solid. Before assessing whether the stock is worth buying, let's first take a closer look at its second-quarter results.
XOM’s Q2 Earnings Snapshot
ExxonMobil reported earnings per share of $3.52 (excluding identified items), which missed the Zacks Consensus Estimate of $3.68. The bottom line, however, increased from the year-ago level of $1.64.
Total quarterly revenues of $116.01 billion beat the Zacks Consensus Estimate of $95.8 billion. The top line improved from the year-ago figure of $81.51 billion. For more details, read our article: XOM Q2 Earnings Miss Estimates Despite Record Production Growth.
Image Source: Zacks Investment Research
Chevron Corporation (CVX - Free Report) and BP plc (BP - Free Report) are two other prominent integrated energy companies. Both CVX and BP have already posted results.
High Oil Price to Aid Upstream Operations of XOM
West Texas Intermediate (“WTI”) crude is trading at more than the $75-per-barrel mark. The high price is being backed by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $76.26 per barrel this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting ExxonMobil's exploration and production activities, which derive the majority of its earnings.
The company has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing new drilling techniques and artificial intelligence to boost and optimize production volumes at lower cost structures.
In Guyana, XOM has made several oil and gas discoveries, further highlighting its solid production outlook. Robust production from both assets has been aiding its top and bottom lines. In both resources, the breakeven costs are low.
XOM’s Solid Balance & Dividend Commitment
Investors should also keep in mind that XOM has a strong balance sheet, on which it could rely during an unfavorable business environment. The debt-to-capitalization of ExxonMobil is significantly lower than the industry’s composite stocks.
Coming to the integrated energy giant’s dividend commitment story, over the past 43 years, ExxonMobil has been rewarding shareholders with annual dividend hikes at an average rate of 5.8%.
What Should Investors Do Now?
The positive developments are getting reflected in the price chart. In the past year, XOM has jumped 44.6%, outpacing the industry’s 41.1% growth. BP and CVX, two other integrated players in the same space, have gained 31.7% and 26.2%, respectively.
Price Chart
Image Source: Zacks Investment Research
Coming to the valuation story, XOM is trading at a premium. On a relative basis, the stock is trading at an 8.67x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a premium compared with the broader industry average of 6.73x. BP and CVX are trading at 3.28x and 7.58x, respectively.
Image Source: Zacks Investment Research
To conclude, despite the solid business outlook, it wouldn’t be wise to bet on XOM right away, given the stock’s overvaluation. Those who have already invested may hold the stock. Currently, XOM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
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Should You Buy ExxonMobil Stock Despite Its Q2 Earnings Miss?
Key Takeaways
Last Friday, ExxonMobil Holdings Corporation (XOM - Free Report) announced second-quarter 2026 earnings that missed expectations owing to the conflicts in the Middle East that hurt oil and gas production. However, non-Middle East upstream production achieved its strongest levels in more than two decades.
Thus, it is clear that despite the earnings shortfall, ExxonMobil’s core businesses continue to show considerable strength. Also, considering the solid crude pricing environment, the integrated energy giant’s overall business outlook remains solid. Before assessing whether the stock is worth buying, let's first take a closer look at its second-quarter results.
XOM’s Q2 Earnings Snapshot
ExxonMobil reported earnings per share of $3.52 (excluding identified items), which missed the Zacks Consensus Estimate of $3.68. The bottom line, however, increased from the year-ago level of $1.64.
Total quarterly revenues of $116.01 billion beat the Zacks Consensus Estimate of $95.8 billion. The top line improved from the year-ago figure of $81.51 billion. For more details, read our article: XOM Q2 Earnings Miss Estimates Despite Record Production Growth.
Chevron Corporation (CVX - Free Report) and BP plc (BP - Free Report) are two other prominent integrated energy companies. Both CVX and BP have already posted results.
High Oil Price to Aid Upstream Operations of XOM
West Texas Intermediate (“WTI”) crude is trading at more than the $75-per-barrel mark. The high price is being backed by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $76.26 per barrel this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting ExxonMobil's exploration and production activities, which derive the majority of its earnings.
The company has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing new drilling techniques and artificial intelligence to boost and optimize production volumes at lower cost structures.
In Guyana, XOM has made several oil and gas discoveries, further highlighting its solid production outlook. Robust production from both assets has been aiding its top and bottom lines. In both resources, the breakeven costs are low.
XOM’s Solid Balance & Dividend Commitment
Investors should also keep in mind that XOM has a strong balance sheet, on which it could rely during an unfavorable business environment. The debt-to-capitalization of ExxonMobil is significantly lower than the industry’s composite stocks.
Coming to the integrated energy giant’s dividend commitment story, over the past 43 years, ExxonMobil has been rewarding shareholders with annual dividend hikes at an average rate of 5.8%.
What Should Investors Do Now?
The positive developments are getting reflected in the price chart. In the past year, XOM has jumped 44.6%, outpacing the industry’s 41.1% growth. BP and CVX, two other integrated players in the same space, have gained 31.7% and 26.2%, respectively.
Price Chart
Coming to the valuation story, XOM is trading at a premium. On a relative basis, the stock is trading at an 8.67x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a premium compared with the broader industry average of 6.73x. BP and CVX are trading at 3.28x and 7.58x, respectively.
To conclude, despite the solid business outlook, it wouldn’t be wise to bet on XOM right away, given the stock’s overvaluation. Those who have already invested may hold the stock. Currently, XOM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.