Energy giant Exxon Mobil (XOM) expects lower oil and gas prices to weigh on its second-quarter earnings. At the mid-point of the estimates provided by the company in an SEC filing, lower energy prices are expected to have a $1.5 billion impact on its Q2 bottom line. Exxon Mobil is scheduled to announce its second-quarter earnings on August 1. Wall Street expects the company to report earnings per share (EPS) of $1.55, reflecting about a 27% year-over-year decline.
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Exxon Expects Weak Energy Prices to Weigh on Q2 Earnings
According to Exxon’s update on its Q2 performance, a decline in the prices of liquids is expected to drag down the upstream earnings by $800 million to $1.2 billion compared to the first quarter. Meanwhile, lower natural gas prices are expected to impact earnings by $300 million to $700 million.
Exxon’s weak outlook follows dismal Q2 projections by European rival Shell (SHEL), which expects lower trading earnings. RBC Capital analyst Biraj Borkhataria noted that Exxon has a much smaller trading division compared to Shell, and thus was not impacted by the same issues.
Oil prices have been under pressure this year due to uncertainty over global demand amid tariff woes and oversupply by OPEC+. According to Reuters, Benchmark Brent crude prices averaged $66.71 per barrel in the second quarter of 2025, reflecting an 11% sequential decline due to increased supply from the OPEC+ group of producers. Meanwhile, U.S. natural gas prices fell 9% in the June quarter compared to Q1 2025. Last week, OPEC+ raised its August production levels to a higher-than-expected 548,000 barrels per day, further adding to pressure on oil prices, which have been falling after seeing a brief uptick due to the Israel-Iran conflict.
Is Exxon Stock a Buy, Sell, or Hold?
In reaction to Exxon’s Q2 update, Mizuho analyst Nitin Kumar revised his estimates to reflect commodity price movements and other aspects. He expects Q2 EPS of about $1.72. The 5-star analyst contends that while commodity prices were a headwind for Upstream earnings, he expects supporting pricing in Energy Products and Chemicals/Specialty Products to largely offset this weakness.
Kumar also adjusted his share count for anticipated buybacks using the average share price during the second quarter. The analyst expects overall upstream volumes to be largely flat compared to the first quarter of 2025, with a modest increase projected in the second half of the year. Kumar has a Hold rating on Exxon stock with a price target of $124.
Overall, Wall Street has a Moderate Buy consensus rating on Exxon Mobil stock, backed by nine Buys and five Hold recommendations. The average XOM stock price target of $123.50 indicates an 11.15% upside potential from current levels. Exxon stock is up by about 3.3% year-to-date.
