How ExxonMobil's Balance Sheet Helps Navigate Oil Volatility
ExxonMobil Holdings Corporation XOM, an integrated energy giant, generates the bulk of its earnings from its upstream operations. With a strong presence in the prolific Permian Basin and offshore Guyana resources, its top and bottom lines are highly susceptible to fluctuations in oil and natural gas prices.
But investors should not worry much about this vulnerability. With a debt-to-capitalization of 13.73%, the energy giant has significantly lower exposure to debt capital. Thus, the company can rely on its strong balance sheet when oil and natural gas prices fall and the business scenario becomes unfavorable.
Also, with lower exposure to debt capital, XOM can secure additional debt on favorable terms during uncertain situations, allowing it to operate smoothly, pursue lucrative acquisitions and continue rewarding shareholders.
CVX & EOG Also Have Low Debt Load
Chevron Corporation CVX and EOG Resources Inc. EOG, with robust balance sheets, can also sail through an unfavorable business environment on their strong financials. While CVX has a debt-to-capitalization of 15.94%, EOG’s debt-to-capitalization is 19.92%.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 38.6% over the past year compared with the industry’s 38.5% growth.
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From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 8.87X. This is above the broader industry average of 5.76X.
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The Zacks Consensus Estimate for XOM’s 2026 earnings has seen upward revisions over the past 30 days.
Image Source: Zacks Investment Research
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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Chevron Corporation (CVX) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
