ExxonMobil Stock: Buy, Hold, or Take Profits After Q3 Earnings?

On Oct 31, Exxon Mobil Corporation XOM announced third-quarter 2025 earnings that exceeded expectations, thanks to the record production in Permian and Guyana. This has made the integrated energy giant’s production outlook bright. However, before coming to the investment conclusions, we need to analyze the energy major’s business fundamentals and overall business environment.

ExxonMobil’s Q3 Earnings Snapshot

ExxonMobil reported third-quarter earnings per share of $1.88 (excluding identified items), which beat the Zacks Consensus Estimate of $1.81.

Total quarterly revenues of $85.3 billion lagged the Zacks Consensus Estimate of $86.8 billion. The top line also declined from the year-ago figure of $90.02 billion. For more details, read our blog: ExxonMobil Beats Q3 Earnings Estimates, Boosts Dividend Again.

Chevron Corporation CVX and BP plc BP are two other prominent integrated energy companies. Both CVX and BP have already reported third-quarter 2025 results.

Upstream Operations Continue to Back ExxonMobil

XOM has a strong 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 has been capable of boosting its well recoveries by up to as much as 20%.

In Guyana, XOM has made several oil and gas discoveries, further highlighting the company’s solid production outlook. Notably, record production from both resources has been aiding its top and bottom lines. Importantly, in both resources, the breakeven costs are low, thereby aiding XOM in continuing its upstream business even during a low crude pricing environment.

ExxonMobil’s Resilient Refining & Conservative Capex

XOM’s resilient refining operations give support when oil prices turn low and upstream business suffers. The company highlighted on its third-quarter earnings call that low-value fuel is getting upgraded in its Singapore Resid Upgrade to high-value end products, thereby meeting the growing demand for cleaner fuels.

The energy giant also has a conservative capital spending strategy while maintaining strong productivity. XOM highlighted its intention of keeping its spending below the lower end of its 2025 cash capital expenditures guidance of $27 billion to $29 billion.

Time to Bet on XOM Stock Now?

ExxonMobil also has a strong focus on returning capital to shareholders, having raised its annual dividend payments consecutively for 43 years.

Despite the positive developments, XOM has gained just 9.1% year to date, underperforming the 10% improvement of the composite stocks belonging to the industry. Both CVX and BP outperformed XOM, gaining 9.6% and 24.2%, respectively, over the same time frame.

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This probably reflects XOM’s excessive dependence on upstream operations, which makes it highly vulnerable to the volatility in oil and natural gas prices. Notably, XOM generates the king size of its earnings from the upstream operations.

Coming to the valuation story, ExxonMobil is overvalued. This is reflected by the fact that it trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.50X, which is above the broader industry average of 4.56X. CVX and BP trade at a trailing 12-month EV/EBITDA of 6.81X and 3.29X, respectively.

Thus, it is not the right time to bet on the stock, but those who have already invested can retain it. ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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