Zacks Industry Outlook Exxon Mobil, Chevron, BP and Vista Energy

For Immediate ReleaseChicago, IL – February 7, 2025 – Today, Zacks Equity Research Equity are Exxon Mobil Corp. XOM, Chevron Corp. CVX, BP plc BP and Vista Energy SAB de CV VIST.Industry: Energy - IntegratedLink: https://www.zacks.com/commentary/2410979/4-integrated-energy-stocks-to-benefit-from-solid-industry-prospectsAmid the fluctuations and uncertainties of the energy market, oil prices continue to soar, creating a highly favorable landscape for upstream businesses. Integrated energy giants stand resilient, leveraging their robust midstream operations that deliver steady, fee-based revenues from strategically positioned pipeline and storage assets.This financial strength reinforces the promising outlook for the Zacks Oil and Gas Integrated International industry, ensuring stability even in volatile times. Additionally, these companies are actively participating in carbon capture and storage (CCS) projects, effectively balancing environmental considerations within the conventional energy sector.Among the frontrunners in the industry that will likely make the most of the handsome business scenario are Exxon Mobil Corp., Chevron Corp., BP plc and Vista Energy SAB de CV.About the IndustryThe Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe.Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products. In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies’ downstream activities involve chemical businesses that manufacture raw materials for plastics. The integrated players are gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold.3 Trends Shaping the Future of the IndustryHigh Oil Prices: The price of West Texas Intermediate (WTI) crude has surged above $70 per barrel, creating an advantageous climate for exploration and production activities. Similarly, Brent crude is performing well, trading at more than $75 per barrel. The U.S. Energy Information Administration projects the average spot prices for WTI and Brent in 2025 at $70.31 and $74.31 per barrel, respectively. This indicates a favorable upstream business environment for integrated oil companies.Stable Fee-Based Revenues: The midstream operations of integrated companies are less susceptible to commodity price volatility. This stability arises from the fact that pipeline and storage assets are typically contracted by shippers on a long-term basis, ensuring consistent fee-based revenue streams.Strong Focus on Lowering Emissions: Integrated industry players operating both within the United States and internationally have acknowledged climate change as a significant risk that must be addressed. These companies are not only concentrating on lowering greenhouse gas emissions and reducing flaring rates but also actively participating in multiple carbon CCS projects worldwide.Zacks Industry Rank Indicates Bullish OutlookThe Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #85, which places it in the top 34% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Before we present a few stocks that you may want to consider, let’s take a look at the industry’s recent stock market performance and valuation picture.Industry Underperforms Sector and S&P 500The Zacks Oil and Gas Integrated International industry has underperformed the broader Zacks Oil - Energy sector and the Zacks S&P 500 composite over the past year.The industry has risen 5.7% over this period, trailing the S&P 500’s rally of 24.2% and the broader sector’s improvement of 12.7%.Industry's Current ValuationSince oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt.On the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 4.00X, lower than the S&P 500’s 18.93X. It is also lower than the sector’s trailing 12-month EV/EBITDA of 4.42X.Over the past five years, the industry has traded as high as 6.55X and as low as 2.75X, with a median of 4.09X.4 Integrated International Stocks Moving Ahead of the PackBP: The British energy giant plans to become a net-zero emissions player by 2050 or earlier. The company, currently carrying a Zacks Rank #3 (Hold), has solid upstream and downstream activities. BP also has a strong focus on reducing its debt load and has been returning capital to shareholders through buybacks and dividends.Chevron: It is also a leading integrated energy player with operations across the world. Apart from a strong balance sheet, it has a solid capital discipline that will help it tide over volatile commodity prices. The energy major’s conservative capital spending will probably help CVX generate considerable cash flow, even in an unstable business scenario. The primary growth driver for the #3 Ranked stock, at least in the near to medium term, is its low-cost Permian projects. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.ExxonMobil: It is among the largest integrated energy companies in the world. The energy major can rely on its strong balance sheet to withstand any business turmoil. ExxonMobil, with a Zacks Rank of 3, is banking on low-cost project pipelines centered around the Permian — the most prolific basin in the United States — and offshore Guyana resources. XOM has a steadfast commitment to reducing greenhouse gas emissions and is actively participating in multiple CCS projects worldwide.Vista Energy, a leading exploration and production company, has a significant presence in Vaca Muerta, a highly productive shale oil and gas play outside of North America. The company, currently carrying a Zacks Rank #3, has set an ambitious goal of achieving net-zero emissions by 2026.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP): Free Stock Analysis Report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Vista Oil & Gas, S.A.B. de C.V. Sponsored ADR (VIST): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks