ExxonMobil's Q2 Earnings on Deck: Should You Bet on the Stock?

ExxonMobil Holdings Corporation XOM is set to report second-quarter 2026 results on July 31, before the opening bell.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.87 per share, implying a surge of almost 136% from the year-ago reported number. It has witnessed one downward estimate revision in the past seven days. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $95.8 billion, suggesting a roughly 18% rise from the year-ago actuals.

XOM beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 6.04%. This is depicted in the graph below:  

Image Source: Zacks Investment Research

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 isn’t the case here.

The leading integrated energy player has an Earnings ESP of -2.40%. 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

In its latest 8-K SEC filings, XOM stated that it is likely to see a sequential improvement in the June quarter upstream earnings by $3.5 billion to $3.9 billion due to an increase in liquid prices.

To have an idea of how oil prices behaved in the June quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK, WTI spot prices for April, May and June of this year were $100.32 per barrel, $102.13 per barrel and $84.81 per barrel, respectively, per EIA data. Commodity prices were $63.54 per barrel, $62.17 per barrel and $68.17 per barrel, respectively, in April, May and June of 2025, according to the EIA.

A constructive oil-price backdrop due to the Iran war aided the company’s exploration and production businesses in the June quarter of this year, similar to BP plc BP and Chevron Corporation CVX.

XOM added that stronger margins from its Energy Products segment are likely to have provided a $2.0 billion to $2.4 billion sequential benefit.

XOM’s Price Performance & Valuation

XOM's stock has jumped 37.2% over the past year, outperforming the industry’s 35.6% surge. BP has gained 28.4% over the same time frame, while Chevron has rallied 21%.

One-Year Price Chart

Image Source: Zacks Investment Research

While XOM’s stock price has outperformed the industry, the company appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) is 10.23x, reflecting that it is trading at a premium compared with the industry average of 6.71x. Both BP and CVX are valued lower at 3.15x and 9.85x, respectively.

Image Source: Zacks Investment Research

Investment Thesis of XOM

ExxonMobil 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 lightweight proppant technology and hence is capable of boosting its well recoveries by up to as much as 20%.

According to the data from the Federal Reserve Bank of Dallas, the shut-in price for existing wells in the Midland, a sub-basin of the Permian, is $42 per barrel. For Delaware, another sub-basin, the Federal Reserve Bank of Dallas estimated the price at $34 per barrel.

With West Texas Intermediate (“WTI”) crude oil trading above the $80-per-barrel mark, significantly above the shut-in prices, it makes sense for XOM to continue production in the wells. Although the upstream business seems lucrative now, the high oil price is hurting the company’s refining operations, since the input costs have jumped. Also, with a significant proportion of earnings being generated from upstream activities, the company’s business is highly vulnerable to the volatility in commodity prices.

Last Word

Given the backdrop, it might not be wise for investors to bet on the integrated energy giant ahead of earnings because of its overvaluation. However, those who have already invested may hold on to the stock.

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This article originally published on Zacks Investment Research (zacks.com).

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