Key Takeaways
- ExxonMobil reports third-quarter results Friday morning with its stock less than $2 below its 52-week high after a 52% total return this year.
- Its own filing flags a $4.5 billion lift from refining margins against a $1.3 billion hit to upstream earnings from lower liquids prices.
- Shares already trade above the $179 average price target, and a Joliet refinery outage hit right in the middle of a refining boom.
- Watch the buyback pace, the Joliet restart and whether Guyana’s fifth production vessel starts on time in the fourth quarter.
Refining is about to rescue ExxonMobil (XOM)’s quarter.
The oil giant reports third-quarter results before the bell on Friday. Its stock closed Thursday at $183, up 0.7% and less than $2 below its 52-week high. Shares have returned 52% this year, dividends included.
That rally came through a rough stretch for Middle East supply. Exxon said the Strait of Hormuz closure would cut its third-quarter production in the region by about 750,000 oil-equivalent barrels a day.
So the stock is near its highs while one of its regions is partly offline. Something else has to be working.
The filing that previewed everything
Exxon already told investors most of the story. Its October 16 filing on market factors laid out three big swings versus the second quarter:
- Lower liquids prices: about a $1.3 billion hit to upstream earnings
- Stronger refining margins: about a $4.5 billion lift to Energy Products
- Timing effects: about $2.5 billion, hitting GAAP results only
Net, refining more than covers the upstream drag. Analysts expect adjusted EPS of roughly $3.98 to $4.12, compared with $3.52 last quarter, which missed the $3.56 consensus.
So what does that step up look like against recent quarters?
Landing in that range would put quarterly EPS at its highest level since 2022.
Guyana and the Permian deliver
Production is the other lever. Exxon pumped 4.514 million oil-equivalent barrels a day in the second quarter, its highest in more than two decades excluding the Middle East disruption. Permian output topped a record 1.8 million barrels a day.
Guyana adds more soon. The fifth production vessel there is on track to start in the fourth quarter with 250,000 barrels a day of capacity, and Exxon is already weighing a ninth.
CEO Darren Woods has pitched that consistency for a while. He described Exxon on the fourth-quarter call as “a higher-return, lower-cost, technology-led company.”
The scale shows up against its closest European rival…
Exxon earned $14.5 billion in the second quarter, while Shell (SHEL) posted $9.8 billion in adjusted earnings. Shell followed this week with its biggest quarterly profit since 2022, so the refining tailwind is industry-wide.
TIKR tracks 25 analysts on Exxon Mobil. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Exxon Mobil, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Exxon Mobil’s Analyst Ratings
Priced past the Street
Here’s the catch. At $183, Exxon trades above the $179 average analyst price target.
How much is the market paying for Exxon’s cash flow today?
At 7.4x forward EBITDA and 12.5x forward earnings, the stock isn’t stretched. But those multiples assume oil prices and refining margins stay elevated, and both can turn fast.
Some risks are already on the table. Exxon shut a catalytic reformer at its 275,000 barrel-a-day Joliet refinery this month, right in the middle of a refining boom. Executives also canceled trips to the ADIPEC conference in Abu Dhabi amid the Iran conflict.
Then there’s the cash. Exxon returned $9.4 billion in the second quarter, including $5.1 billion in buybacks, and investors want that pace to hold.
My take: Exxon looks well run, and Guyana plus the Permian give it volume growth few majors can match. Still, buying above the Street’s target near a peak in refining margins feels late to me. I’d want a pullback before adding.
The next checkpoint is the 8:30 a.m. CT call today. Listen for Joliet’s restart, the Guyana startup timing and any change to the buyback pace.
So what is Exxon Mobil stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
