ExxonMobil Earnings: Results Remain Robust in the Face of Falling Oil Prices

Key Morningstar Metrics for Exxon Mobil

• Fair Value Estimate: $129.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: High

What We Thought of Exxon Mobil’s Earnings

Exxon Mobil’s XOM third-quarter earnings surpassed market expectations, falling to $8.1 billion from $8.6 billion a year ago but increasing from the second quarter. Lower oil prices weighed on earnings, offset in part by higher volumes and stronger refining margins. Capital return guidance was unchanged.

Why it matters: Exxon continues to deliver strong results in the face of weakening oil prices. A strong refining market helped, but the results of its structural cost reduction and new, high-margin volumes continue to pay off. Combined with a low debt load, this should support earnings and returns in the face of potentially lower oil prices.

• Production of 4.8 million barrels of oil equivalent per day was higher by 3.0% from the second quarter, driven by record production from Guyana and the Permian. Exxon plans to produce 4.7 mmboe/d in 2025 and 5.4 mmboe/d in 2030.
• Structural cost reductions totaled $2.2 billion year to date, reaching $14.3 billion cumulatively since 2019 and on track to reach the goal of $18.0 billion by 2030.

The bottom line: Our narrow moat rating and $129 fair value estimate are unchanged, leaving the shares trading at about an 11% discount. Concerns over non-hydrocarbon spending and the near-term path of oil prices are likely weighing on shares.

• Debt ticked up slightly during the quarter to a net debt capital of 9.5% from 8.0% in the second quarter, but it remains relatively low. Management reiterated a $20 billion buyback for 2025, but they could lower it slightly in 2026 if oil prices weaken and they decide not to meaningfully expand the balance sheet.
• Management indicated capital spending would come in slightly below their guidance range of $27 billion-$29 billion. A wider update will come on Dec. 9 with the corporate plan update.