A High Velocity Correction Brings Opportunity - 2Q26 IOC Earnings Preview

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A High Velocity Correction Brings Opportunity - 2Q26 IOC Earnings Preview

TD SECURITIES (USA) LLC INDUSTRY UPDATE

July 2, 2026

■Integrated Oil: Integrated Oils & Major A High Velocity Correction Brings Opportunity

Producers - 2Q26 IOC Earnings Preview

Jason Gabelman THE TD COWEN INSIGHT

646 562 1309

We see pockets of opportunity within IOCs following a rapid correction in crude prices and

jason.gabelman@tdsecurities.com

equities. SHEL has been weakest ytd, though a peer-high EPS beat and buyback raise should

Will Avila provide support. TTE (top pick) could raise its buyback. US IOC EPS is more difficult to forecast

646 562 1344 given timing dynamics, though CVX could provide positive updates around TCO capacity and

will.avila@tdsecurities.com

affiliate distributions.

Price Target Changes

Equities May Remain Volatile N/T But Appear Undervalued On '27 FCFBP $40.00 (Prior $44.00)

BP.LN 506.00p (Prior 570.00p) The XLE has given back wartime gains and then some since the ceasefire and very rapid

CVX $197.00 (Prior $205.00)

correction in oil prices. IOCs are generally able to generate excess cash at $70/bbl, while

SHEL $107.00 (Prior $110.00)

refining and global gas add to a supportive backdrop. Brent was $60 early in the year, andSHEL.LN 3,965.00p (Prior 4,168.00p)

TTE $102.00 (Prior $106.00) perhaps that reflects a floor, though we would expect oil to average a higher level ($70 - $80)

TTE.FP €89.00 (Prior €91.00) given a geopolitical prism premium and any near-term weakness used to rebuild >1B bbls of

XOM $155.00 (Prior $172.00) lost global inventories. We see the group trading at a 300bps discount to historical valuations

on TD Cowen '27 estimates embedding $75 Brent. We value the group on $75 Brent in 2027

and $70 thereafter.