BP p.l.c. provides carbon products and services. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments. It engages in the production of natural gas, and integrated gas and power; trading of gas; operation of onshore and offshore wind power, as well as hydrogen and carbon capture and storage facilities; trading and marketing of renewable and non-renewable power; and production of crude oil. In addition, the company involved in convenience and retail fuel, EV charging, Castrol lubricant, aviation, B2B, and midstream businesses; refining and oil trading; and bioenergy business. The company was founded in 1908 and is headquartered in London, the United Kingdom.

BP p.l.c.

Air quality is deteriorating across many regions due to rising emissions from transportation, heavy industry, and urbanization, posing serious risks to public health and the environment. As a result, improving air quality through cleaner fuels, stricter emission standards, and sustainable technologies has become a global priority. To meet these challenges, Exxon Mobil Corporation XOM is expanding its carbon capture and storage (CCS) operations along the U.S. Gulf Coast—a vital industrial and energy-producing corridor—as part of its Low-Carbon Business.
XOM expects to expand its footprint for capturing carbon emissions at industrial sources by launching multiple CCS projects in Texas and Louisiana in 2026. However, the CCS operations are expected to be carried out in partnership with Linde and Nucor.
Due to increased global demand for data and computing power, ExxonMobil plans to supply electricity using natural gas while capturing and storing the carbon emissions. This enables data centers to meet growing power needs with much lower emissions than traditional fossil-fuel power. By the end of 2026, XOM will decide whether to build its first low-carbon data center.
BP & CVX Are Involved in Reducing Emissions Like XOM
Other leading integrated energy giants Chevron Corporation CVX and BP p.l.c. BP are also investing in their low-carbon businesses to improve air quality. BP has CCS facilities in the U.K., while CVX has major CCS projects in Australia. To lower costs and emissions, BP can produce green hydrogen from low-cost renewable electricity or generate blue hydrogen by combining natural gas with carbon capture. Notably, Chevron surpassed 11 million tons of CO??? injected into underground storage by November 2025.
XOM’s Price Performance, Valuation & Estimates
ExxonMobil’sshares have gained 24.8% over the past year compared with the 17.2% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 8.71X. This is above the broader industry average of 5.43X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the to-be-reported quarter has been unchanged over the past seven days. Meanwhile, for 2025 and first-quarter 2026, XOM's earnings estimates have seen downward revisions.
Image Source: Zacks Investment Research
ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Here's How XOM Is Using CCS to Cut Emissions & Power Data-Driven World

Baker Hughes BKR is set to report fourth-quarter 2025 results on Jan. 25, after the closing bell.
Let us examine the factors that are expected to have impacted this oilfield service player’s quarterly performance. However, before that, it would be worth reviewing BKR’s performance in the previous quarter.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, its adjusted earnings of 68 cents per share beat the Zacks Consensus Estimate of 61 cents, primarily driven by solid performance from BKR’s Industrial & Energy Technology business segment.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of roughly 11.41%. This is depicted in the graph below:
Baker Hughes Company Price and EPS Surprise
Estimate Trend of BKR
The Zacks Consensus Estimate for fourth-quarter earnings per share of 67 cents has been revised downward in the past seven days. The estimated figure indicates a 4.3% decline from the prior-year reported number.
The Zacks Consensus Estimate for revenues of $7.1 billion indicates a 4.2% decrease from the year-ago recorded figure.
Factors to Consider for BKR
According to data from the U.S. Energy Information Administration (EIA), average spot prices for Cushing, OK, West Texas Intermediate (WTI) crude declined sequentially in the fourth quarter, averaging $60.89 per barrel in October, $60.06 in November and $57.97 in December. This compares unfavorably with the prior-year period, when average prices stood at $71.99, $69.95 and $70.12 per barrel, respectively. The year-over-year deterioration in oil prices likely curtailed drilling activity, which may have weighed on Baker Hughes’ quarterly performance.
Given the less supportive commodity-price environment in fourth-quarter 2025 relative to the year-ago period, demand for SLB’s oilfield services is also expected to have softened during the December-ended quarter, potentially pressuring its results.
That said, Baker Hughes’ recently completed acquisition of Continental Disc Corporation may have provided an offset to some of the macro headwinds. The deal is margin-accretive and strategically complementary, enhancing the company’s flow and pressure-control capabilities while expanding its recurring revenue base.
Earnings Whispers
Our proven model does not conclusively indicate an earnings beat for BKR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: BKR has an Earnings ESP of -2.32%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks to Consider
Here are some stocks that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
ExxonMobil XOM has an Earnings ESP of +1.50% and a Zacks Rank #3. The firm is scheduled to release fourth-quarter 2025 earnings on Jan. 30. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for 2026 earnings of ExxonMobil is pegged at $6.83 per share. Valued at around $563 billion, XOM is up 71.7% in a year.
BP plc BP currently has an Earnings ESP of +2.47% and a Zacks Rank #3.
BP is scheduled to release fourth-quarter 2025 earnings on Feb. 10. The Zacks Consensus Estimate for BP’s earnings is pegged at 57 cents per share, suggesting a 30% increase from the prior-year reported figure.
Imperial Oil Limited IMO is set to release fourth-quarter 2025 earnings on Jan. 30.
The Zacks Consensus Estimate for IMO’s 2026 earnings is pegged at $5.18 per share, which indicates a decrease of 8.5% from the prior-year reported figure.
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BKR to Report Q4 Earnings: Here's What You Need to Know

Exxon Mobil Corporation XOM, a U.S.-based oil and gas giant, continues to sail through volatility in crude prices by relying on its integrated business model and balance sheet strength. However, the company relies on its upstream segment for a significant part of its earnings. Therefore, it might be worth assessing whether the current oil price environment is beneficial for XOM.
The recent geopolitical development concerning Venezuela may result in incremental barrels flowing into the oil and gas market, further weighing down on the oil price. At present, oil prices are trailing close to the $60 per barrel mark, significantly lower than the previous year. However, Exxon Mobil has stated that even though the country sits on significant oil reserves, its energy infrastructure has been crippled over the years. The company believes that significant changes to the legal and commercial frameworks are necessary to revive Venezuela’s oil and gas industry. Hence, XOM is unlikely to be affected by further supply-demand imbalance.
Furthermore, Exxon Mobil’s integrated business model allows it to capitalize on the softness in crude prices through its refining operations. Lower crude prices imply cheaper feedstock for the company’s refineries, which supports refining gains. Additionally, XOM has low exposure to debt capital, which reduces its financial risk. The company is capable of withstanding a tough business environment by relying on its strong balance sheet.
CVX and BP: Two Leading Integrated Energy Majors
Chevron Corporation CVX and BP plc BP are two other global integrated energy firms. Both CVX and BP are involved in the upstream and downstream segments of the oil and gas business, which allows them to stabilize earnings and sustain profitability even in challenging commodity pricing environments.
XOM’s Price Performance, Valuation & Estimates
Shares of Exxon Mobil have risen 20.1% over the past year compared with the 14.5% gain of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 8.64X. This is above the broader industry average of 5.40X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for XOM’s 2025 earnings has seen upward revisions over the past 30 days.
Image Source: Zacks Investment Research
XOM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How Exxon Mobil's Integrated Strengths Offset Crude Price Weakness

Phillips 66 PSX is a leading refiner in the energy sector, capable of processing a wide range of feedstocks into finished products. Conventional fuels, on which the world remains heavily dependent, harm the environment by releasing greenhouse gases that threaten ecosystems and human health. As global attention on air quality standards intensifies to mitigate this issue, the demand for cleaner fuels and technologies that reduce emissions is expected to increase.
To meet the rising demand for cleaner fuels and emissions-reducing technologies, PSX is diversifying its business to generate lower-carbon fuels, including renewable diesel, sustainable aviation fuel (SAF) and renewable naphtha. These fuels are generated at the Rodeo Renewable Energy Complex, one of the largest renewable fuels facilities in the world and at the Humber facility in the United Kingdom.
The Rodeo Renewable Energy Complex uses feedstock generated from waste oils, fats, greases and vegetable oils to produce renewable diesel and SAF. However, the Humber facility has the capability to refine plant-based or waste materials inputs, along with traditional fuel inputs, to produce lower-carbon fuels. Currently, PSX is producing around 50,000 barrels of renewable fuels daily.
Furthermore, to reduce environmental impact, PSX is adopting an approach called co-processing, which involves breaking down used plastics and using them as part of the fuel-making process, thereby reducing plastic waste and the need for new raw materials.
BP & VLO Also Producing Low Carbon Fuel Like PSX
BP plc BP and Valero Energy Corporation VLO have a presence in refining operations and are involved in the production of SAF and renewable diesel. Etlas, a joint venture between BP and Corteva, Inc., has been formed to enhance biofuel production. Through Etlas, BP aims to produce 1 million metric tons of feedstock by mid-2030s, which is enough to generate more than 800,000 tons of biofuel.
Like PSX, VLO also produces renewable diesel and SAF from waste oils, fats, greases and vegetable oils. VLO has an annual capacity of 1.2 billion gallons of renewable diesel and 235 million gallons of neat SAF production.
PSX’s Price Performance, Valuation & Estimates
PSX shares have gained 14.9% over the past year compared with the 12.7% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, PSX trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 14.29X. This is above the broader industry average of 4.56X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the to-be-reported and ongoing quarters has been revised downward over the past seven days. However, for full-year 2025, the consensus mark for PSX's earnings has increased by a penny during the same period.
Image Source: Zacks Investment Research
Phillips 66 currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How PSX Is Powering the Energy Transition Toward Cleaner Fuels

Kinder Morgan Inc. KMI is set to report fourth-quarter 2025 results on Jan. 21, after the closing bell.
Let us examine the factors that are expected to have impacted this pipeline operator’s quarterly performance. However, before that, it would be worth reviewing KMI’s performance in the previous quarter.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, its adjusted earnings of 29 cents per share were in line with the Zacks Consensus Estimate, primarily backed by business activities associated with natural gas pipelines.
The company’s earnings met the Zacks Consensus Estimate in two of the trailing four quarters, while missing the same twice, delivering an average negative surprise of 1.47%. This is depicted in the graph below:
Kinder Morgan, Inc. Price and EPS Surprise
Estimate Trend for KMI
The Zacks Consensus Estimate for fourth-quarter earnings per share of 36 cents has remained unchanged in the past seven days. The estimated figure indicates a 12.5% jump from the prior-year reported number.
The Zacks Consensus Estimate for revenues of $4.4 billion implies a 10.9% increase from the year-ago recorded figure.
Factors to Consider for KMI
Kinder Morgan is a major player in the midstream energy space, operating an extensive natural gas pipeline network of about 66,000 miles. The company transports nearly 40% of the natural gas produced in the United States. Given that most of its contracts are fee-based and structured as take-or-pay agreements, KMI likely delivered steady cash flows during the December-end quarter of 2025.
Notably, the Zacks Consensus Estimate for Kinder Morgan’s fourth-quarter revenues from natural gas pipeline is pegged at $2,928 million, suggesting an increase from $2,437 million in the prior-year quarter. The Zacks Consensus Estimate for Kinder Morgan’s fourth-quarter earnings from natural gas pipeline is pegged at $1,564 million, suggesting an increase from $1,392 million in the prior-year quarter.
Earnings Whispers
Our proven model does not indicate an earnings beat for KMI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: KMI has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: KMI currently carries a Zacks Rank #3.
Stocks to Consider
Here are some stocks that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
BP plc BP currently has an Earnings ESP of +2.74% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
BP is scheduled to release fourth-quarter 2025 earnings on Feb. 10. The Zacks Consensus Estimate for BP’s earnings is pegged at 58 cents per share, suggesting a 31.8% increase from the prior-year reported figure.
Baker Hughes Company BKR is an integrated energy company. It currently has an Earnings ESP of +1.96% and a Zacks Rank #3.
BKR is scheduled to release fourth-quarter 2025 earnings on Jan. 25. The Zacks Consensus Estimate for BKR’s earnings is pegged at 66 cents per share, indicating a 5.7% decrease from the prior-year reported figure.
Halliburton Company HAL currently has an Earnings ESP of +5.17% and a Zacks Rank #2.
HAL is set to release fourth-quarter 2025 earnings on Jan. 21. The Zacks Consensus Estimate for HAL’s earnings is pegged at 54 cents per share, indicating a 22.9% decline from the prior-year reported figure.
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KMI to Report Q4 Earnings: Here's What You Need to Know

Key Points
Realty Income offers a dividend yield of 5.3%, while BP offers a yield of 5.6%.
Realty Income is a large and globally diversified real estate investment trust (REIT).
BP is a large and globally diversified integrated oil company.
Dividend yield alone doesn't tell you enough about a stock to make a final investment decision. That's highlighted by looking at BP (NYSE: BP) and its 5.6% yield and comparing it to Realty Income (NYSE: O) and its 5.3% yield.
If all you cared about was yield, you'd probably buy BP. And you'd probably end up sorely disappointed. Here's why Realty Income is a better dividend stock.
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Examining the dividend
As noted, BP's dividend yield is higher than Realty Income's. Yield, however, is just a simple math equation, comparing the annualized dividend to the current share price. There are other factors to consider. One big one for dividend investors is dividend reliability, since many are looking to use the income they generate from their portfolios to pay for living expenses.
Realty Income has increased its dividend annually for 30 consecutive years. BP cut its dividend in 2020. To be fair, BP cut its dividend along with a decision to broaden its carbon fuels business to include more renewable power and clean energy. According to the CEO at the time, it was a decision deeply rooted in strategy.
There's just one problem: BP has since walked back its commitment to clean energy and renewable power. What's notable is that Realty Income has made some big strategic moves, too. For example, it exited the office property sector, expanded geographically into Europe, and is currently starting an asset management business geared toward institutional investors. None of these moves involved a dividend cut.
You might argue that BP is an oil company and therefore different. That argument loses strength when you consider that fellow integrated energy giant TotalEnergies (NYSE: TTE) also pivoted toward clean energy and renewable power. Unlike BP, TotalEnergies didn't cut its dividend, and it hasn't walked back the strategic decision it made, either.
BP may have a slightly higher yield, but it hasn't proven that it has the same level of commitment to returning value to shareholders via a reliable dividend. If you need your dividends to pay for living expenses, Realty Income wins hands down.
Examining the business model
Investors might still fall back on the argument that BP and Realty Income have very different business models. That's absolutely true. Realty Income is a large real estate investment trust (REIT). It owns income-producing properties in the United States and Europe, with a focus on single-tenant retail assets leased using a net lease approach. A net lease requires the tenant to pay for most property-level operating costs.
Realty Income is the largest player in the net lease space, with a portfolio of more than 15,500 properties. Although any single asset is high risk because there is just a single tenant in the property, across a large portfolio, the net lease approach is fairly low risk. This is because the cost and effort of maintaining properties is pushed onto the tenant. Without question, Realty Income is built to be a boring and reliable dividend stock, noting that its business is backstopped by an investment-grade-rated balance sheet.
By contrast, BP operates in the oil patch, where commodity price volatility is the norm. Financial results in the energy sector tend to rise and fall along with oil prices. In that regard, investors should expect BP's earnings to swing widely. It seems logical that this would lead to dividend volatility as well.
Only peers ExxonMobil and Chevron have managed to increase their dividends for decades through both good and bad oil markets. Once again, BP falls short.
BP has one of the highest yields among its closest integrated energy peers. Given the dividend history, that's hardly surprising, though having a debt-to-equity ratio that's twice that of the next closest peer is an issue that likely also worries investors.
All in, despite an attractive yield, BP just isn't that attractive as a dividend stock.
Be careful what dividend yields you buy
In many ways, comparing BP and Realty Income is like comparing apples to oranges. However, they have similar yields and would likely fall very close to each other on a search based on dividend yield. Realty Income has proven it is a reliable dividend stock. BP has proven it isn't.
That said, there are other oil stocks that have proven to be more reliable dividend investments, with TotalEnergies even offering a slightly higher yield.
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Reuben Gregg Brewer has positions in Realty Income and TotalEnergies Se. The Motley Fool has positions in and recommends Chevron and Realty Income. The Motley Fool recommends BP. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Best Dividend Stock to Buy Right Now: Realty Income vs. BP

Valero Energy Corporation VLO, a downstream player has strong foothold in the refining sector. Valero Energy boasts a robust network of refineries that is capable of processing a wide range of feedstocks, including heavy to light sour and sweet crude to its finished products.
With rising global awareness on air quality standards, cleaner fuels and technologies that support emissions reduction are expected to see stronger demand going forward. To address this rising awareness and to meet low-carbon fuel standards, VLO has established refineries capable of producing renewable diesel and Sustainable Aviation Fuel (SAF).
The feedstock used to convert into renewable diesel and SAF is derived from used cooking oil, recycled animal fats and inedible corn oil. Compared to conventional fuels, renewable diesel and SAF are capable of an 80% reduction in greenhouse gas (GHG) emissions, according to the company.
With the expansion of its annual renewable diesel capacity to 1.2 billion gallons from an initial capacity of 160 million gallons, VLO’s focus not only aligns with the current global awareness shift but also creates a pathway for enhanced cash flow while strengthening its business model. Moreover, Valero can produce up to 235 million gallons of neat SAF and is currently the world’s second-largest renewable diesel producer.
BP & PSX Also Producing Low Carbon Fuel Like VLO
BP p.l.c. BP and Phillips 66 PSX, which have a presence in refining operations, are involved in the production of SAF and renewable diesel. BP recently formed Etlas, a joint venture with Corteva, Inc., to enhance biofuel production. PSX, like BP, produces renewable fuels at its Rodeo Renewable Energy Complex. Like VLO, PSX produces renewable diesel and SAF from waste oils, fats, greases and vegetable oils. PSX has a production capacity of 50,000 barrels per day for renewable fuels.
VLO’s Price Performance, Valuation & Estimates
VLO shares have gained 30% over the past year compared with the 11.8% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, VLO trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 8.83X. This is above the broader industry average of 4.56X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VLO’s 2025 earnings has remained constant over the past seven days.
Image Source: Zacks Investment Research
Valero Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How Valero Is Reinforcing Its Refining Leadership in a Low-Carbon World

Key Points
Crude oil and natural gas prices have waned and will likely remain weak for the foreseeable future.
This company can still perform well in a low-price environment, however.
Meanwhile, it's also evolving for the eventual inevitable end of fossil fuels and the transition to renewables.
It's been a tough three years for energy stocks. After surging during the COVID-19 pandemic, prices of crude oil and natural gas have both fallen since the middle of 2022, dragging many of the sector's stocks lower.
There's no end in sight either. Indeed, the U.S. Energy Information Administration predicts crude oil prices will sink to an average of about $55 per barrel this year and next, down from 2025's average of $69, further threatening the business's profit margins.
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If you're an income-minded investor who can look a little further down the road, though, oil giant BP (NYSE: BP) may be a great "forever" name to step into while its 15% pullback from its early 2023 peak has pumped its forward-looking dividend yield up to a healthy 5.6%.
More longevity than you might expect
Rumors of the oil and gas business's death have been greatly exaggerated. The so-called "peak oil" pivot (where daily consumption of crude oil begins to permanently dwindle)? It's been pushed back to 2050, according to the International Energy Agency, jibing with outlooks from OPEC as well as industry powerhouse ExxonMobil. And even then, we'll still need plenty of oil for the next several decades. BP's got the assets it needs to deliver for this time frame.
That being said, perhaps the chief reason income investors might want to jump into this energy name right now is that it's already managing the inevitable -- even if lengthy -- shift away from fossil fuels and toward the aforementioned renewables.
Case(s) in point: BP's partnership with JERA Nex is designed to develop offshore wind farms. It can currently generate on the order of 1 gigawatt, but plans for eventual power production of 13 gigawatts. That's enough electricity for roughly 10 million homes, or more relevantly now, several data centers. Meanwhile, Lightsource BP is working on generating and storing solar power for use by institutional clients, including utility companies.
It's still a relatively small business for BP, and one that hasn't yet paid off. In fact, the company recently announced it would be booking a noncash impairment of between $4 billion and $5 billion for its low-carbon business, reminding investors just how challenging the transition from fossil fuels to renewables can be.
BP is still wisely preparing for this future, though, recognizing that it's better to be proactive rather than reactive ... even if it means the occasional setback.
Perhaps more important to income investors, the renewables business that it's building is also one that -- like its oil and gas business -- will generate recurring revenue, and therefore support continued dividend payments.
Not the best, but one of the better
There is one arguable "catch" with this income stock's dividend. That is, it's not consistent. Although it generally rises, its per-share payouts tend to reset when crude prices suffer jolting setbacks, as they did in 2010, and then again in 2020 (and as most energy names do).
So, if you need a permanently predictable dividend payment, this ticker might not be the best one to start with or the only one to hold.
With a strong starting yield of 5.6% and a compelling long-term future, though, BP certainly wouldn't make for a bad third or fourth holding in an income portfolio.
Should you buy stock in BP right now?
Before you buy stock in BP, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

1 Magnificent Oil Stock Down 15% to Buy and Hold Forever for Its Dividend

For Immediate Release
Chicago, IL – January 16, 2026 – Today, Zacks Equity Research discusses Chevron Corp. CVX, BP plc BP and Petrobras PBR.
Industry: Oil & Gas - Integrated, International
Link: https://www.zacks.com/commentary/2818300/weak-oil-prices-loom-3-integrated-energy-stocks-that-could-hold-up
The U.S. Energy Information Administration ("EIA") expects rising inventories of oil to hurt crude prices. The soft crude pricing environment is thus likely to affect the integrated energy players' exploration and production operations. At the same time, the rising demand for renewable energy adds uncertainty to the prospects of the Zacks Oil and Gas Integrated International industry, creating a bleak outlook.
Among the companies in the industry that are expected to survive the business challenges are Chevron Corp., BP plc and Petrobras.
About the Industry
The 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 making plastics. The integrated players are now 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 Industry
Soft Oil Price to Hurt Cash Flows: In its latest short-term energy outlook, EIA projected the average spot price for West Texas Intermediate crude at $52.21 per barrel for 2026, significantly lower than $65.40 per barrel for 2025. The possibility of soft oil prices signals that cash flows from the upstream business of the integrated energy players may fall this year.
Slowdown in Production Growth to Hurt Upstream Business: There has been a slowdown in oil production growth in the upstream businesses of integrated energy companies in the United States due to shareholder demands for a greater focus on returning capital rather than investing in production expansion. As production growth slows, output decreases, which can lead to reduced revenues. Since upstream operations depend heavily on volume to generate income, any stagnation in production growth has a direct and negative impact on their bottom line.
Growing Demand for Renewables a Concern: Governments, investors and stakeholders are placing growing emphasis on addressing climate change, leading to an increased demand for renewable energy. Consequently, the demand for products reliant on oil, natural gas and natural gas liquids is expected to decline, with solar and wind energy gaining prominence in the energy landscape. The integrated energy firms are adversely impacted by these trends as they are primarily engaged in the production and transportation of fossil fuels, such as oil, and selling refined petroleum products.
Zacks Industry Rank Indicates Bearish Prospects
The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #233, which places it in the bottom 5% 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 bleak 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 Outperforms Sector, Lags S&P 500
The Zacks Oil and Gas Integrated International industry has outperformed the broader Zacks Oil - Energy sector but underperformed the Zacks S&P 500 composite over the past year.
The industry has rallied 13.9% over this period compared with the S&P 500's surge of 21.5% and the broader sector's improvement of 5.8%.
Industry's Current Valuation
Since 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 5.22X, lower than the S&P 500's 19.04X. It is also below the sector's trailing 12-month EV/EBITDA of 5.55X.
Over the past five years, the industry has traded as high as 6.61X and as low as 2.79X, with a median of 4.18X.
3 Integrated International Stocks to Keep a Close Eye On
BP is an integrated energy company like Exxon Mobil Corporation and anticipates that demand for oil and natural gas will stay strong. Increasing global demand for LNG will continue to support natural gas. Therefore, BP, through its upstream activities, is well-positioned to benefit from the rising demand for clean energy. Also, the refining activities of the British energy giant, currently carrying a Zacks Rank #3 (Hold), are benefiting from soft crude prices. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Petrobras is also a leading name in the integrated energy space, like XOM. With its breakeven costs much lower, PBR, like XOM, is well-positioned to sail through a soft crude pricing environment. Lifting costs for Petrobras are also low, further aiding the bottom line. Notably, PBR carries a Zacks Rank #3.
Chevron is an integrated energy giant with a stable business model. In the Permian, the most prolific basin in the United States, CVX, with a Zacks Rank of 3, has a strong footprint. Also, the company's downstream business, like XOM, is benefiting from the softer oil prices.
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Zacks Investment Research
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Past 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Zacks Industry Outlook Highlights Chevron, BP and Petrobras

The U.S. Energy Information Administration (“EIA”) expects rising inventories of oil to hurt crude prices. The soft crude pricing environment is thus likely to affect the integrated energy players' exploration and production operations. At the same time, the rising demand for renewable energy adds uncertainty to the prospects of the Zacks Oil and Gas Integrated International industry, creating a bleak outlook.
Among the companies in the industry that are expected to survive the business challenges are Chevron Corporation CVX, BP plc BP and Petrobras PBR.
About the Industry
The 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 making plastics. The integrated players are now 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 Industry
Soft Oil Price to Hurt Cash Flows: In its latest short-term energy outlook, EIA projected the average spot price for West Texas Intermediate crude at $52.21 per barrel for 2026, significantly lower than $65.40 per barrel for 2025. The possibility of soft oil prices signals that cash flows from the upstream business of the integrated energy players may fall this year.
Slowdown in Production Growth to Hurt Upstream Business: There has been a slowdown in oil production growth in the upstream businesses of integrated energy companies in the United States due to shareholder demands for a greater focus on returning capital rather than investing in production expansion. As production growth slows, output decreases, which can lead to reduced revenues. Since upstream operations depend heavily on volume to generate income, any stagnation in production growth has a direct and negative impact on their bottom line.
Growing Demand for Renewables a Concern:Governments, investors and stakeholders are placing growing emphasis on addressing climate change, leading to an increased demand for renewable energy. Consequently, the demand for products reliant on oil, natural gas and natural gas liquids is expected to decline, with solar and wind energy gaining prominence in the energy landscape. The integrated energy firms are adversely impacted by these trends as they are primarily engaged in the production and transportation of fossil fuels, such as oil, and selling refined petroleum products.
Zacks Industry Rank Indicates Bearish Prospects
The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. It carries a Zacks Industry Rank #233, which places it in the bottom 5% 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 bleak 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 Outperforms Sector, Lags S&P 500
The Zacks Oil and Gas Integrated International industry has outperformed the broader Zacks Oil - Energy sector but underperformed the Zacks S&P 500 composite over the past year.
The industry has rallied 13.9% over this period compared with the S&P 500’s surge of 21.5% and the broader sector’s improvement of 5.8%.
One-Year Price Performance
Industry's Current Valuation
Since 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 5.22X, lower than the S&P 500’s 19.04X. It is also below the sector’s trailing 12-month EV/EBITDA of 5.55X.
Over the past five years, the industry has traded as high as 6.61X and as low as 2.79X, with a median of 4.18X.
Trailing 12-Month EV/EBITDA Ratio
3 Integrated International Stocks to Keep a Close Eye on
BP is an integrated energy company like Exxon Mobil Corporation and anticipates that demand for oil and natural gas will stay strong. Increasing global demand for LNG will continue to support natural gas. Therefore, BP, through its upstream activities, is well-positioned to benefit from the rising demand for clean energy. Also, the refining activities of the British energy giant, currently carrying a Zacks Rank #3 (Hold), are benefiting from soft crude prices. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: BP
Petrobras is also a leading name in the integrated energy space, like XOM. With its breakeven costs much lower, PBR, like XOM, is well-positioned to sail through a soft crude pricing environment. Lifting costs for Petrobras are also low, further aiding the bottom line. Notably, PBR carries a Zacks Rank #3.
Price and Consensus: PBR
Chevron is an integrated energy giant with a stable business model. In the Permian, the most prolific basin in the United States, CVX, with a Zacks Rank of 3, has a strong footprint. Also, the company’s downstream business, like XOM, is benefiting from the softer oil prices.
Price and Consensus: CVX
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Indicator	TTM Median
P/E	127.04 13.68
Price/Sales	0.47 1.31
P/B	1.12 1.36
P/FCF	10.08 9.36

Indicator	TTM Median
ROE	0.71 14.19
ROA	0.54 6.72
ROI	1.14 8.42
Net Worth	90.62 1.74
Quick Ratio	0.92 1.04
Current Ratio	1.21 1.23

Indicator	TTM Median
Net Profit Margin	0.29 14.72
Operating Margin	6.07 21.32
Gross Margin	28.19 49.32
Return on tangible equity	1.02 17.43

Indicator	TTM Median
EPS	1.07 0.37
EPS Forecast	1.09 0.32
Revenue	47.68B 210.00M
Gross Profit	14.17B —
EBITDA	9.10B —

BP p.l.c.

TTM metrics for the latest quarter under IFRS and their historical dynamics

Valuation

Debts

Efficiency

Other ratios

Revenue