ExxonMobil's Q4 Earnings on Deck: Should You Stay Invested or Exit?

Core Viewpoint - Exxon Mobil Corporation (XOM) is expected to report its fourth-quarter 2025 results on January 30, with earnings per share (EPS) estimated to rise by 0.6% year-over-year, while revenues are projected to decline by 0.3% compared to the previous year [1][2][6]. Earnings Estimates - The Zacks Consensus Estimate for fourth-quarter earnings is $1.68 per share, reflecting a slight improvement from the previous year [2]. - The estimated revenue for the fourth quarter is $83.2 billion, indicating a decrease from the year-ago figures [2]. - XOM has consistently beaten earnings estimates in the past four quarters, with an average surprise of 5.7% [2]. Earnings Prediction Model - The current model does not predict an earnings beat for XOM, as it has an Earnings ESP of -0.25% and a Zacks Rank of 3 (Hold) [3]. Factors Impacting Earnings - XOM anticipates a sequential decline in upstream earnings by $800 million to $1.2 billion due to lower liquid prices [5]. - The average WTI spot prices for the last quarter were significantly lower than the previous quarter, which may have negatively impacted upstream operations [7]. - Natural gas prices could either increase upstream earnings by $100 million or decrease them by $300 million [8]. Price Performance and Valuation - XOM's stock has increased by 25.9% over the past year, outperforming BP and Chevron [9]. - The current EV/EBITDA ratio for XOM is 8.84, which is above the industry average of 5.43, indicating a premium valuation [11]. Long-term Outlook - Despite the challenges posed by lower crude prices, XOM's long-term outlook remains positive due to its strong presence in the Permian Basin and offshore Guyana, where it has made significant discoveries [14][15]. - The company employs advanced technologies to enhance well recoveries, which could mitigate some impacts of low crude prices [14]. Status of Competitors - Chevron (CVX) and BP are also set to report their fourth-quarter earnings soon, with CVX having a negative Earnings ESP and BP showing a positive outlook [16][17].