How Cheap Is ExxonMobil Stock Once You Look Two Years Out?

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The company’s high price tag today hides a significant discount on future earnings, but that discount only exists if an aggressive growth story actually unfolds. At a glance, ExxonMobil (XOM) stock looks expensive. Trading around $144.51, its trailing price-to-earnings ratio of about 24.0 times earnings might give many investors pause. But that headline number is based on the past, and the real question is what you are paying for the future. If you hold the stock at today’s price, the multiple you pay effectively falls over time as earnings grow. On the earnings analysts expect by 2027, that same $144.51 price tag works out to a multiple of just 13.2 times. That is a 45% lower multiple than the trailing figure, a discount that accrues to a patient holder. You are not buying the stock at 24.0 times earnings; you are effectively buying the earnings two years from now at 13.2 times, assuming the consensus forecast is right. And ExxonMobil is far from alone: which 10 S&P 500 stocks carry the biggest hidden forward discount? Our rankings sort the entire index by how little you are really paying for each name’s growth once the out-year earnings land. That discount, however, is not a free lunch. It is entirely dependent on a significant acceleration in growth. Wall Street consensus assumes ExxonMobil’s revenue will grow about 6.6% a year for the next two years. That is a considerable leap from the company’s recent performance, where revenue actually fell -4.1% over the last twelve months and grew just 2.6% in the most recent quarter. So, where is this expected growth supposed to come from? On its latest earnings call, management pointed to several key drivers. The company “achieved record levels of production in Guyana,” is on track to “increase Permian production year-over-year,” and recently “achieved first LNG at Golden Pass.” These large-scale projects are the foundation for the optimistic forecasts. It is worth noting, however, that while analysts project this growth, management’s own formal guidance focuses on items like capital expenditures and share repurchases, not a specific revenue or earnings target for the coming years. This makes the consensus view more of an independent projection. Of course, a stock priced for this kind of growth can be volatile. For a deeper look at the specific risks facing the company , it is worth understanding the other factors at play. In past market shocks, the stock has fallen as much as 48% from its peak. The forward discount offers a margin of safety, not a guarantee. It is crucial to understand that the multiple compressions are not, by themselves, a gain for you as an investor. If the stock price never moves, you simply end up owning a company trading at 13.2 times its 2027 earnings, which proves you did not overpay. The actual reward only comes from price appreciation. For that to happen, the market must continue to value the shares at a multiple higher than that 13.2 times floor as the earnings arrive. For instance, if the multiple settles at about 18.6 times, roughly halfway between today’s 24.0 times and that floor, the stock would be worth about $204. That implies a gain of about 41% from today’s price. The premium you see on ExxonMobil stock today is not the full story. On the earnings analysts expect two years out, the price is far more ordinary. This suggests that even if the stock price stalls, a long-term holder is not necessarily overpaying for the growth that is priced in. The upside is conditional: if that growth lands and the market keeps awarding the stock a healthy multiple, the share price should compound alongside the earnings. To see if the story is on track, watch the company’s Permian production figures. Management aims to grow full-year Permian production to 1.8 million oil equivalent barrels in 2026, and hitting that target would be a powerful confirmation. Whether you already hold ExxonMobil or you are weighing it now, the appeal is not that the stock is secretly cheap today. It is that you are not overpaying for the growth: on the earnings analysts expect two years out, you are paying an ordinary multiple, even if the price never moves. The upside sits on top of that. If the market keeps paying anything close to today’s multiple as those earnings actually arrive, the price compounds with them. The one catch is that it all rides on a single company’s numbers coming through. And if it is exposure to energy as a whole you want rather than this one name, an energy ETF like XLE covers that single sector, though that still leaves you riding a single slice of the market. That is why the Trefis High Quality (HQ) Portfolio does not lean on any single name: it uses this same valuation-discount discipline to size a measured allocation to strong growth like this, inside a diversified set of 30 high-conviction stocks, re-balanced as the estimates change and with a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.

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