Key Takeaways
- ExxonMobil is up 38% in 2026, and Chevron has done even better, as the war with Iran pushed oil above $100 and sent refining margins soaring.
- ExxonMobil’s third-quarter adjusted earnings reached $17.5 billion on a refining margin nearly triple its fourth-quarter 2025 level.
- Analysts expect ExxonMobil’s earnings per share to peak this year and fall every year through 2029, and Iran peace talks plus the midterm results pulled the stock 11% off its Oct. 30 high.
- A rising dividend and $20 billion of planned 2027 buybacks make ExxonMobil worth holding, but its earnings are at a peak, so it’s a poor one to add to at this price.
ExxonMobil (XOM) is up 38% in 2026, and Chevron (CVX) is up 39%, on a war that sent oil above $100 a barrel and turned refining into a gold mine.
But one week of peace talks and the midterm results knocked ExxonMobil well off its high. So is it time to take profits?
The war did the heavy lifting
Brent shot past $100 after the Strait of Hormuz was effectively closed in late February, and by the third quarter ExxonMobil’s refineries had become its biggest source of profit.
Its indicative refining margin averaged $50.3 a barrel in the third quarter, against $29.0 in the second quarter and $18.3 in the fourth quarter of 2025. Energy Products’ adjusted earnings more than doubled from the second quarter, to $9.1 billion. That put it ahead of the upstream business, whose earnings fell to $7.3 billion on lower oil prices. Five years ago, Energy Products made up about 9% of business-line earnings.
All told, adjusted earnings came to $17.5 billion, or $4.23 a share.
Chevron rode the same wave. Its downstream earned $4.9 billion in the third quarter, against $1.1 billion a year earlier. Even so, its adjusted earnings per share slipped to $5.28 from $6.06 in the second quarter.
CEO Darren Woods argues ExxonMobil’s gains will outlast the war, pointing to $16.9 billion of structural cost savings since 2019. He calls them “lasting improvements.”
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The savings are real, but most of this year’s growth came from refining. Energy Products accounted for $12 billion of the $18.5 billion rise in adjusted earnings over the first nine months. And Woods himself guessed fuel margins will take “certainly well through next year” to get closer to normal.
Analysts already see the fade
Analysts expect ExxonMobil’s earnings per share to peak this year and fall every year after that.
ExxonMobil Holdings (XOM): normalized EPS, actual and consensus estimates, $ per share, fiscal 2024-2029 (TIKR)
Even 2029’s $8.59 estimate sits above 2025’s $6.99, so the Street gives Woods some credit for those savings.
Investors got a taste of the fade in early November. Brent fell nearly 8% on Monday, Nov. 2, after Iranian President Masoud Pezeshkian said the supreme leader had given the government authority to pursue peace talks. On Wednesday, Nov. 4, Brent fell more than 8% again, to about $95, after Democrats won control of Congress in Tuesday’s midterms and traders priced in a faster end to the war. ExxonMobil dropped 4.6% that day, and DZ Bank cut it to Sell with a $170 target. By Friday’s close on Nov. 6, the stock sat 11% below its Oct. 30 closing high of $187.25.
Priced for earnings that hold
ExxonMobil’s forward P/E was 12.6x on Nov. 2, just under its five-year average of 12.8x, and a bit lower after the Nov. 4 drop.
ExxonMobil (XOM): forward (NTM) P/E, last 5 years (TIKR)
That looks fair until you remember it’s an average multiple on war-year earnings. Against what analysts expect for 2028, the same price sits well above that average.
Hold on, but don’t chase it
The cash is what keeps holders around. Free cash flow fell every year, from $58.4 billion in 2022 to $23.6 billion in 2025.
ExxonMobil Holdings (XOM): free cash flow, $ billions, fiscal 2021-2025 (TIKR)
ExxonMobil generated $19.1 billion in the third quarter alone. That cash is paying for a 44th straight annual dividend raise, to $1.07 a quarter from $1.03. It’s also behind the $20 billion of buybacks planned for 2027, which the company ties to reasonable market conditions.
So, take profits or hold on? Hold on. The dividend and buybacks pay you to wait, and Woods expects fuel margins to stay high well into next year. Adding here is another matter: that’s an average multiple on peak earnings, a bad trade if peace sticks. The same goes for Chevron, whose earnings per share already slipped last quarter. A bigger pullback would offer a better entry for either one.
Of course, if a peace deal holds, oil and refining margins could fall faster than analysts expect. The next checks are the 2027 targets ExxonMobil plans to reaffirm later this quarter, and its fourth-quarter results in late January.
So what is ExxonMobil stock actually worth?
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Disclaimer:
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