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Imperial Oil (TSE:IMO)
XASE:IMO
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Imperial Oil
(NYSE MKT:IMO)
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Rating:72Outperform
Price Target:
C$142.00
â–²(3.33% Upside)
Imperial Oil's overall stock score is driven by strong financial performance and positive earnings call highlights, including record production and strategic restructuring plans. However, technical indicators suggest potential short-term bearish momentum, and recent revenue declines and restructuring charges present some risks.
Positive Factors
Strong Cash Flow Generation
Imperial Oil's robust cash flow generation supports its ability to fund operations, invest in growth, and return capital to shareholders, indicating strong financial health.
Record Production Levels
Achieving record production levels enhances Imperial Oil's market position and revenue potential, demonstrating operational efficiency and resource management.
Operational Efficiency Improvements
Reduced unit cash costs improve profitability and competitiveness, allowing Imperial Oil to maintain margins even in volatile market conditions.
Negative Factors
Restructuring Charges
Significant restructuring charges impact short-term earnings, reflecting transitional costs that may affect financial performance until efficiencies are realized.
Impairment Charge
Impairment charges reduce asset values and earnings, indicating potential challenges in asset management and strategic realignment.
Decline in Upstream Earnings
A decline in upstream earnings suggests challenges in maintaining profitability amid fluctuating market conditions, impacting overall financial performance.
Imperial Oil (IMO) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$68.28B
Dividend Yield2.45%
Average Volume (3M)881.30K
Price to Earnings (P/E)17.6
Beta (1Y)1.19
Revenue Growth-6.18%
EPS Growth-14.06%
CountryCA
Employees5,100
SectorEnergy
Sector Strength52
IndustryOil & Gas Integrated
Share Statistics
EPS (TTM)2.17
Shares Outstanding496,861,020
10 Day Avg. Volume916,594
30 Day Avg. Volume881,301
Financial Highlights & Ratios
PEG Ratio1.54
Price to Book (P/B)2.00
Price to Sales (P/S)0.91
P/FCF Ratio11.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$114.84Price Target Upside-16.43% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering9
EPS Forecast (FY)7.28
Revenue Forecast (FY)C$51.46B
Imperial Oil Business Overview & Revenue Model
Company DescriptionImperial Oil Limited engages in exploration, production, and sale of crude oil and natural gas in Canada. The company operates through three segments: Upstream, Downstream and Chemical segments. The Upstream segment explores for, and produces crude oil, natural gas, synthetic oil, and bitumen. As of December 31, 2021, this segment had 386 million oil-equivalent barrels of proved undeveloped reserves. The Downstream segment is involved in the transportation and refining of crude oil, blending of refined products and the distribution, and marketing of refined products. It also transports crude oil to refineries by contracted pipelines, common carrier pipelines, and rail; maintains a distribution system to move petroleum products to market by pipeline, tanker, rail, and road transport; and owns and operates fuel terminals, natural gas liquids, and products pipelines in Alberta, Manitoba, and Ontario. In addition, this segment markets and supplies petroleum products to motoring public through approximately 2,400 Esso and Mobil-branded sites. Further, it sells petroleum products, including fuel, asphalt, and lubricants for industrial and transportation customers, independent marketers, and resellers, as well as other refiners serving the agriculture, residential heating, and commercial markets through branded fuel and lubricant resellers. The Chemical segment manufactures and markets various petrochemicals, benzene, aromatic and aliphatic solvents, plasticizer intermediates, and polyethylene resin. Imperial Oil Limited has a strategic agreement with E3 Metals Corp. to advance a lithium-extraction pilot in Alberta. The company was incorporated in 1880 and is headquartered in Calgary, Canada. Imperial Oil Limited is a subsidiary of Exxon Mobil Corporation.
How the Company Makes MoneyImperial Oil generates revenue primarily through its integrated business model, which includes upstream exploration and production, downstream refining, and marketing operations. The company earns money through the sale of crude oil and natural gas produced from its oil sands and conventional production assets. In the downstream segment, Imperial refines crude oil into various petroleum products and sells them through its retail network and commercial channels. Key revenue streams include the sale of gasoline and diesel at its retail stations, as well as the production and sale of petrochemicals. Significant partnerships, such as joint ventures with other energy companies and collaborations related to technology and sustainability initiatives, also contribute to its earnings. Additionally, fluctuations in global oil prices and operational efficiencies play crucial roles in influencing the company's profitability.
Imperial Oil Earnings Call Summary
Earnings Call Date:Oct 31, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jan 30, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong operational and financial performance, including record production and cash flow, and strategic restructuring plans aimed at future growth. However, notable restructuring and impairment charges, along with a decline in some earnings segments, tempered the positive news.Q3-2025 Updates
Positive Updates
Record-Breaking Cash Flow and Shareholder Returns
Generated cash flow from operations of nearly $1.8 billion and returned over $1.8 billion to shareholders through dividends and buybacks.
Record Production at Kearl
Kearl delivered 316,000 barrels per day gross, the highest quarterly production in the asset's history.
Strong Downstream Utilization
Downstream utilization reached 98%, significantly higher quarter-over-quarter, even with planned turnaround activity.
Operational Efficiency Improvements
Unit cash costs at Kearl reduced to USD 15.13 per barrel, a decrease of nearly USD 4 per barrel compared to the second quarter.
Restructuring Plans for Future Growth
Announced restructuring plans to improve efficiency, with expected annual expense reductions of $150 million by 2028.
Negative Updates
Restructuring Charges
Recorded a restructuring charge of $330 million before tax, with an unfavorable earnings impact of $249 million after tax.
Impairment Charge for Calgary Campus
Signed an agreement to sell the Calgary campus, resulting in a noncash impairment charge of $406 million before tax.
Decline in Upstream Earnings
Net income from the quarter is $1.094 billion, down $143 million from the third quarter of 2024, driven by lower upstream realizations.
Chemical Business Earnings Decline
Chemical business earnings were $21 million, down $7 million compared to the third quarter of 2024, driven by weaker polyethylene margins.
Company Guidance
During Imperial Oil's third quarter 2025 earnings call, the company reported cash flow from operations of nearly $1.8 billion and ended the quarter with approximately $1.9 billion in cash on hand. The company delivered over $1.8 billion to shareholders through dividends and buybacks. Record crude production was achieved, with Kearl delivering 316,000 barrels per day gross, marking the highest quarterly production in the asset's history. Cold Lake's production averaged 150,000 barrels per day, while Syncrude production averaged 78,000 barrels per day. Refinery utilization was high at 98%, even with planned turnaround activity. The company also announced restructuring plans aimed at reducing annual expenses by $150 million by 2028. These actions are expected to enhance cash flow growth through increased production, reduced downtime, and lower operating costs, while leveraging technology and ExxonMobil's expertise. The company recorded a restructuring charge of $330 million before tax, impacting earnings by $249 million after tax, and a noncash impairment charge of $406 million before tax from the sale of its Calgary campus. Net income for the quarter was $539 million, excluding identified items, resulting in $1.094 billion, down $143 million from the third quarter of 2024.Imperial Oil Financial Statement Overview
Summary
Imperial Oil demonstrates strong profitability with a solid gross profit margin and a robust balance sheet characterized by low leverage and high return on equity. However, the recent revenue decline and room for improvement in cash flow efficiency slightly temper the overall financial performance.Income Statement
Imperial Oil's income statement reflects a strong gross profit margin of 18.45% and a net profit margin of 9.48% for the TTM, indicating solid profitability. However, the company experienced a revenue decline of 3.20% in the TTM, which could be a concern if the trend continues. The EBIT and EBITDA margins are healthy, showing efficient operations despite the revenue dip.75
Positive
Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio of 0.17, suggesting conservative leverage. Return on equity is strong at 19.47%, indicating effective use of equity to generate profits. The equity ratio is stable, reflecting a solid financial position with a good balance between assets and equity.80
Positive
Cash Flow
Cash flow analysis shows a positive free cash flow growth of 6.53% in the TTM, demonstrating improved cash generation. The operating cash flow to net income ratio is close to 1, indicating good cash conversion from earnings. However, the free cash flow to net income ratio of 0.72 suggests room for improvement in cash flow efficiency.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 48.01B | 51.51B | 50.90B | 59.51B | 37.51B | 22.28B |
| Gross Profit | 8.15B | 9.20B | 9.22B | 12.19B | 6.09B | 1.72B |
| EBITDA | 7.69B | 8.24B | 8.27B | 11.28B | 5.23B | 845.00M |
| Net Income | 4.00B | 4.79B | 4.89B | 7.34B | 2.48B | -1.86B |
Balance Sheet | ||||||
| Total Assets | 30.85B | 42.94B | 41.20B | 43.52B | 40.78B | 38.03B |
| Cash, Cash Equivalents and Short-Term Investments | 1.34B | 979.00M | 864.00M | 3.75B | 2.15B | 771.00M |
| Total Debt | 3.03B | 4.16B | 4.33B | 4.43B | 5.42B | 5.28B |
| Total Liabilities | 13.84B | 19.46B | 18.98B | 21.11B | 19.05B | 16.61B |
| Stockholders Equity | 17.01B | 23.47B | 22.22B | 22.41B | 21.73B | 21.42B |
Cash Flow | ||||||
| Free Cash Flow | 4.78B | 4.11B | 1.95B | 8.96B | 4.37B | -70.00M |
| Operating Cash Flow | 6.58B | 5.98B | 3.73B | 10.48B | 5.48B | 798.00M |
| Investing Cash Flow | -1.74B | -1.82B | -1.69B | -618.00M | -1.01B | -802.00M |
| Financing Cash Flow | -4.47B | -4.04B | -4.92B | -8.27B | -3.08B | -943.00M |
Imperial Oil Technical Analysis
Positive
137.43
Price Trends
128.20
Positive
126.18
Positive
114.50
Positive
Market Momentum
1.10
Negative
73.46
Negative
95.15
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:IMO, the sentiment is Positive. The current price of 137.43 is above the 20-day moving average (MA) of 121.47, above the 50-day MA of 128.20, and above the 200-day MA of 114.50, indicating a bullish trend. The MACD of 1.10 indicates Negative momentum. The RSI at 73.46 is Negative, neither overbought nor oversold. The STOCH value of 95.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:IMO.
Imperial Oil Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $100.05B | 15.14 | 16.17% | 5.23% | 8.06% | -10.64% | |
77 Outperform | C$82.78B | 16.11 | 11.41% | 3.91% | -3.08% | -31.48% | |
73 Outperform | C$48.34B | 14.79 | 10.65% | 3.40% | -9.17% | -12.97% | |
72 Outperform | C$68.28B | 17.57 | 16.52% | 2.45% | -6.18% | -14.06% | |
71 Outperform | C$66.97B | 127.29 | 7.97% | 0.19% | 23.88% | 350.69% | |
70 Outperform | C$78.97B | 23.26 | 12.96% | 4.41% | -3.98% | -33.45% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
TSE:IMO
Imperial Oil
137.43
42.16
44.26%
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153.81
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116.48%
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Canadian Natural
48.03
5.21
12.16%
TSE:CVE
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25.57
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22.56%
TSE:SU
Suncor Energy
68.91
13.79
25.02%
TSE:TRP
TC Energy
75.89
11.15
17.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.