Will ExxonMobil's Low-Carbon Business Act as Its Next Growth Engine?

Exxon Mobil Corporation XOM, is a well-known integrated energy giant operating across the entire oil and gas value chain.

With global interest steadily shifting toward enhanced air quality, demand for cleaner fuels and technologies that aid in improving air quality is expected to rise in the coming days. To address evolving societal needs, ExxonMobil has established a low-carbon business portfolio aligned with its core strengths. Assets of this new business include carbon capture and storage (CCS), hydrogen fuels and lithium metal.

CCS captures CO2 emissions from industrial sources, transports them and then permanently stores them deep underground to prevent the same from entering the atmosphere, reducing global warming and ocean acidification. The strategic U.S. Gulf Coast positioning allows CCS to leverage existing industrial hubs, transportation networks and cost-efficient storage reservoirs.

To meet rising demand, a few more CSS projects, along with partners, are going to be operational in the coming days, creating a pathway for enhanced cash flow while strengthening its business model. XOM generates the majority of its revenues from its upstream business.

Moreover, hydrogen fuel and lithium offer dependable, low-carbon power solutions to meet the rapidly growing energy needs of data centers.

BP & CVX Also Investing in CCS Like XOM

Other leading integrated giants are Chevron Corporation CVX and BP p.l.c. BP. Like XOM, BP and CVX are investing in their low-carbon businesses, which are developing economic projects to improve air quality. BP has its CCS facilities in the U.K. and aims to capture 20-30 megatons of carbon dioxide by 2030. Alternatively, CVX has its CCS project located in Australia, and has injected more than 11 million tons of carbon dioxide underground by November 2025.

XOM’s Price Performance, Valuation & Estimates

XOM shares have gained 10.8% over the past year compared with the 5.7% improvement of the composite stocks belonging to the industry.

From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.69X. This is above the broader industry average of 4.87X.

The Zacks Consensus Estimate for XOM’s 2025 earnings has been unchanged over the past seven days.

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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