Key Takeaways
- ExxonMobil stock is up 43% in the past year after the war with Iran sent oil above $100 and refining margins to records, and Chevron rode the same boom.
- About $12 billion of the $18.5 billion rise in ExxonMobil’s adjusted earnings over the first nine months of 2026 came from its refining business.
- CEO Darren Woods calls the gains lasting, but analysts expect earnings per share to fall each year from 2026 through 2029.
- With Brent dipping below $90 on talk of the war ending, the stock looks like a hold until results show what a normal oil market leaves.
ExxonMobil (XOM) stock is up 43% in the past year, mostly thanks to the war with Iran. In late February, the fighting effectively shut the Strait of Hormuz. Brent crude jumped above $100 a barrel, and refining margins climbed to records.
Chevron (CVX) rode the same boom. Its stock is up 41% over the same year, and its third-quarter earnings rose more than 180% from a year earlier. This week, Brent briefly dipped below $90 for the first time since August, after President Trump said the war could end soon. That leaves both majors with the same question: how much of this year’s profit survives a normal oil market?
The windfall is mostly refining
Refining had already swung back to a profit in the second quarter,even as ExxonMobil’s earnings per share missed estimates by a dime. Then came the third quarter, reported Oct. 30. Energy Products, ExxonMobil’s refining business, more than doubled its adjusted earnings from the second quarter, to $9.1 billion. The indicative refining margin the company tracks averaged $50.3 a barrel, against $29.0 in the second quarter and $16.3 in the first.
Over the first nine months, Energy Products supplied about $12 billion of the $18.5 billion rise in adjusted earnings. The company turned the quarter into $19.1 billion of free cash flow. It also raised its quarterly dividend to $1.07 a share, its 44th straight annual increase. Next year, it plans $20 billion of buybacks.
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Analysts are pricing in a fade
ExxonMobil chairman and CEO Darren Woods argues the gains go deeper than the war. In the third-quarter release, he pointed to $16.9 billion of structural cost savings since 2019. He also cited a Beaumont refinery expansion that helped lift Gulf Coast distillate output about 40% since then. “These are lasting improvements, not simply the result of favorable prices and margins,” he said.
Analysts give him some of that. Still, their consensus has normalized earnings per share falling every year from 2026 through 2029:
ExxonMobil Holdings (XOM): normalized EPS, actual and consensus estimates, $ per share, fiscal 2024-2029 (TIKR)
Even 2028’s $10.40 sits nearly 50% above the $6.99 ExxonMobil earned in 2025, so the Street does expect a higher floor than before the war. If oil stays where it is, I’d expect the 2027 estimate, still close to this year’s, to come down first.
At about 12x forward earnings, the stock trades below its five-year average of 13x:
ExxonMobil (XOM): forward (NTM) P/E, last 5 years (TIKR)
But those forward earnings are war-year earnings. In 2022, the last time oil companies earned windfall profits, the multiple bottomed at 6.6x. Priced on analysts’ 2028 estimate instead, the stock trades at about 16x, above that average.
I’d hold until the windfall fades
ExxonMobil and Chevron both fell on Nov. 4 after Democrats won the Senate. Brent dropped more than 8% that day, to about $95. DZ Bank cut ExxonMobil to Sell with a $170 target that morning. The consensus target is $185, and TD Cowen raised its own to $193 after the report.
Some of what Woods points to will outlast the war, like the cost savings and the Beaumont expansion. But most of this year’s jump in earnings came from refining margins that a reopened Strait would squeeze. If I owned ExxonMobil, I’d hold it for the dividend and the buybacks. I wouldn’t add at these prices until results show what a normal oil market leaves behind.
ExxonMobil’s plan update, expected in December, and its fourth-quarter results early next year will show us how much of that margin sticks. Of course, if the peace talk fizzles and Hormuz stays tight, refining profits could hold up longer than analysts expect.
So what is ExxonMobil stock actually worth?
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