ExxonMobil Earnings: Targets on Track Amid Benefits of Market Disruptions, Particularly Refining

Key Morningstar Metrics for ExxonMobil Holdings

• Fair Value Estimate
  : $156.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : High

What We Thought of ExxonMobil Holdings’ Earnings

ExxonMobil Holdings’ XOM second-quarter 2026 adjusted earnings fell slightly short of expectations. Earnings and cash flow significantly improved as timing effects from mark-to-market derivative requirements unwound. Shareholders’ return guidance was unchanged.

Why it matters: In the current environment, earnings are likely to be messy as uncertainty translates into commodity price volatility, lost volumes, and results that may differ from benchmarks. However, Exxon’s underlying progress toward portfolio improvement continues, and it’s well-positioned to capitalize on the current environment, particularly historically high refining margins.

• The company continues to high-grade its portfolio, reaching $16.3 billion in cumulative structural cost savings since 2019 and on track toward its $20.0 billion 2030 target.
• Total upstream production was 4.5 million oil-equivalent barrels per day, flat with a year ago, despite record Permian production of more than 1.8 mboe/d, due to lost Middle East volumes.

The bottom line: Our $156 fair value estimate and narrow-moat Rating are unchanged. Given Exxon’s larger Qatar position, it has a relatively high exposure to the closure of the Strait of Hormuz. The impact from the closure is about 750 mboe/d relative to 2025 levels or about 15% of global production. However, as the quarter shows, the price impact is largely offsetting the volume impact.

• Importantly, Exxon is perhaps best positioned among peers to benefit from the currently strong refining margins given its relatively large downstream footprint.
• Also, in the event of the strait opening, refining margins are likely to prove stickier than oil and natural gas prices given the high number of global refining outages and now low inventory levels that need rebuilding.