ExxonMobil (XOM) Eyes $16B Earnings Surge by 2027 From Fuels
ExxonMobil Corporation XOM, the largest U.S. oil company, announced that it expects its motor fuels and chemicals earnings to reach $16 billion by 2027, marking a notable $4-billion increase from the current level.
ExxonMobil executives, in a briefing at the company’s Spring, TX, headquarters, revealed their confidence in the sustained growth of demand for refined products and chemicals. This stands in contrast to recent projections by the International Energy Agency, which predicts a decline in the use of oil for transportation fuels post 2026.
According to senior VP Jack Williams, while gasoline demand is expected to reach its peak toward the end of the decade, it will plateau for a prolonged period.
XOM has made substantial investments in expanding its refining capacity, with a notable example being the 250,000 barrels per day expansion of its Beaumont, TX refinery in January, which highlights the company's commitment to meeting the rising demand.
The company's recent investment in its Baytown, TX refinery, co-located with a chemical unit, signals a move toward the production of chemicals. While refining remains a vital aspect of ExxonMobil's operations, a significant portion of its efforts will be directed toward the chemicals sector.
Karen McKee, president of the Product Solutions unit, believes that XOM's merged refining, petrochemicals and low-carbon business unit could be a "game changer" for the company.
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the energy sector are USA Compression Partners, LP USAC and Helix Energy Solutions Group, Inc. HLX, both currently sporting a Zacks Rank #1 (Strong Buy), and Core Laboratories Inc CLB, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
USA Compression Partners is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USAC has witnessed an upward earnings estimate revision for 2024 in the past 30 days.
Helix Energy Solutionsis an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on its growing well intervention and robotic operations. HLX has witnessed an upward earnings estimate revision for 2023 and 2024 over the past 60 days.
Core Laboratories’ strong presence in the emerging shale plays and its global footprint will provide for steady growth rates going forward. CLB’s technology-heavy portfolio of proprietary products and services gives it the opportunity to optimize production from new and existing fields. Core Labs has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
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