West Texas Intermediate (“WTI”) crude is trading at more than the $80-per-barrel mark. The high prices are being driven by ongoing tensions in the Middle East. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $80.88 per barrel for this year, higher than $65.40 last year. A highly favorable pricing environment for the commodity is likely to continue supporting ExxonMobil Holdings Corporation’s XOM 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.
Will CVX & COP Also Gain From High Oil?
Like XOM, Chevron CorporationCVX and ConocoPhillipsCOP will benefit from the ongoing strength in oil prices. Let’s delve a little deeper.
With COP generating a significant proportion of revenues from crude oil, the high price of the commodity is extremely favorable for the leading oil and gas exploration and production company, much like other energy giants such as XOM and CVX.
The upstream energy giant also has low-cost drilling opportunities across the Permian, Eagle Ford and Bakken that could be successfully developed over two decades. Thus, the outlook for ConocoPhillips’ upstream operations looks bright.
Chevron, on the other hand, has been witnessing a growth in production volumes, thanks to its footprint in the Permian – the most prolific basin in the United States. CVX is thus well-poised to gain from prevailing high oil prices.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 50.8% over the past year compared with the industry’s growth of 43.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.19X. This is above the broader industry average of 5.76X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for XOM’s 2026 earnings hasn’t seen any revisions over the past seven days.
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Keep it Clean. Please avoid obscene, vulgar, lewd,
racist or sexually-oriented language. PLEASE TURN OFF YOUR CAPS LOCK. Don't Threaten. Threats of harming another
person will not be tolerated. Be Truthful. Don't knowingly lie about anyone
or anything. Be Nice. No racism, sexism or any sort of -ism
that is degrading to another person. Be Proactive. Use the 'Report' link on
each comment to let us know of abusive posts. Share with Us. We'd love to hear eyewitness
accounts, the history behind an article.
(0) comments
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.