Cost Savings and Production Growth Strengthen ExxonMobil's Outlook

ExxonMobil Holdings Corporation XOM remains well-positioned for continued growth in earnings and cash flows, supported by its advantaged assets and focus on cost efficiency. The company’s earnings are primarily driven by its Upstream segment, aided by advantaged volume growth in Guyana and the Permian Basin. XOM expects its Permian production to reach 2.5 million oil equivalent barrels per day (Moebd) by the end of this decade, while total production is anticipated to reach 5.5 Moebd.

The company continues to invest in production growth from these advantaged upstream assets. In Guyana, ExxonMobil’s fifth FPSO is on track for startup by year-end, while the Longtail development is on the path to reach a final investment decision. New technology deployment and extended-reach development in the Permian Basin are anticipated to enhance well recovery and drive capital efficiency.

XOM’s structural cost savings have reached $16.3 billion since 2019. With the oil price environment remaining favorable for oil and gas producers, XOM is expected to benefit from its focus on production growth. The company intends to deliver approximately $25 billion of earnings growth and $35 billion of cash-flow growth between 2024 and 2030, supported by its advantaged assets, high-value product growth and further cost reductions.

Other Industry Majors With a Low-Cost Production Profile

ConocoPhillips COP and EOG Resources, Inc. EOG are two other energy firms that own low-cost resource bases in the shale basins of the United States, supporting their profitability.

ConocoPhillips is involved in the exploration and production of crude oil, natural gas liquids (NGLs), bitumen and natural gas. The company boasts a strong asset base in the shale basins of the United States, including the Delaware Basin, Midland Basin, Eagle Ford and Bakken shale. These assets support low-cost production, which enables ConocoPhillips to maintain its profitability and generate free cash flow even during periods of low oil prices.

EOG Resources is a leading independent exploration and production company with operations focused on the prolific acres in the United States as well as several resource-rich international basins. EOG boasts a high-return, low-decline asset base and stands out among the low-cost producers in the United States. The company’s focus on maintaining a resilient balance sheet and lowering production costs should enable it to weather oil price volatility.

XOM’s Price Performance, Valuation & Estimates

Shares of XOM have gained 56.8% over the past year compared with the industry’s growth of 50.4%.

Image Source: Zacks Investment Research

From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.27X. This is above the broader industry average of 5.82X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for XOM’s 2026 earnings hasn’t seen any revisions over the past seven days.

Image Source: Zacks Investment Research

XOM, COP and EOG each currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

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

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

Zacks Investment Research