Imperial Oil intends to increase its capital budget for 2026.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 15 2025
0mins
Should l Buy IMO?
Source: SeekingAlpha
Capital Expenditures: Imperial Oil is budgeting C$2 billion-C$2.2 billion for capital and exploration expenditures in 2026, an increase from the current year's C$1.9 billion-C$2.1 billion range.
Production Forecast: The company anticipates upstream production of 441,000-460,000 gross boe/day in 2026, slightly higher than the 433,000-456,000 boe/day expected for this year, driven by reliability improvements and growth at Kearl and Cold Lake.
Refinery Throughput: Refinery throughput is projected to be 395,000-405,000 bbl/day, a decrease from the 2025 guidance of 405,000-415,000 bbl/day, with a capacity utilization rate of 91%-93%.
Turnarounds Planned: Imperial Oil plans to conduct turnarounds at Cold Lake, Syncrude, and Kearl, extending the turnaround interval at the K1 plant from two years to four years after achieving a record run length of 10 years.
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Analyst Views on IMO
Wall Street analysts forecast IMO stock price to fall
10 Analyst Rating
1 Buy
4 Hold
5 Sell
Moderate Sell
Current: 119.350
Low
67.67
Averages
82.50
High
100.78
Current: 119.350
Low
67.67
Averages
82.50
High
100.78
About IMO
Imperial Oil Limited is a Canada-based integrated energy company. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. Its segments include Upstream, Downstream and Chemical. The Upstream segment is organized and operates to explore for and produce crude oil and its equivalent, and natural gas. The Downstream segment is organized and operates to refine crude oil into petroleum products and to distribute and market these products. The Chemical segment is organized and operates to manufacture and market hydrocarbon-based chemicals and chemical products. The Company's operations include Cold Lake, Kearl, Syncrude, Nanticoke, Sarnia and Strathcona refinery.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction: Following the assassination of Iran's Supreme Leader Khamenei in joint U.S.-Israeli strikes, traders rushed to gain energy exposure, resulting in significant pre-market gains for related ETFs, highlighting the market's sensitivity to energy price fluctuations.
- Strait of Hormuz Risks: The potential closure of the Strait of Hormuz, responsible for over 27% of global crude oil shipments, has raised alarm among retail traders, further exacerbating market uncertainty amid escalating tensions.
- Military Action Outlook: President Trump indicated that the current military operations against Iran could last four to five weeks, intensifying market expectations for future oil price volatility and prompting investors to reassess their energy asset allocations.
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Concerns Over Enrichment: Trump emphasized that there should be no enrichment of uranium by Iran, reiterating a hardline stance on nuclear negotiations.
Frustration with Current Negotiations: He conveyed that the current state of negotiations with Iran is unsatisfactory and does not meet U.S. expectations.
Overall Sentiment: Trump's comments reflect a broader frustration with Iran's actions and the ongoing diplomatic efforts surrounding their nuclear program.
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- Valuation Concerns: While RBC analyst Greg Pardy praised Imperial's leadership, assets, and diversified cash flow, he noted that the stock's valuation appears stretched after several years of strong performance, which could undermine investor confidence moving forward.
- Mixed Q4 Performance: Pardy indicated that Imperial's Q4 performance was mixed, and the company's restructuring efforts aimed at achieving annual efficiency gains could pose additional risks, potentially impacting future profitability and operational stability.
- Sell Recommendation: TD Cowen maintained a Sell rating on Imperial Oil, with analyst Menno Hulshof stating that although the stock has outperformed its peers, its current valuation is excessive, advising investors to seek better risk-reward opportunities elsewhere.
See More
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- Adjusted Earnings Decline: Excluding special items, adjusted earnings per share dropped to C$1.97 from C$2.37 a year ago, highlighting challenges in cost control and profitability.
- Revenue Decrease: Total revenues and other income for the quarter decreased to C$11.28 billion from C$12.61 billion last year, missing analysts' expectations of C$12.00 billion, reflecting weak market demand.
- Dividend Increase: The company declared a 20% increase in its quarterly dividend to C$0.87 per share, payable on April 1, 2026, demonstrating a commitment to shareholder returns despite declining profitability.
See More
Imperial Oil Reports Strong Q4 Earnings and Production Milestones
- Earnings Performance: Imperial Oil reported a Q4 non-GAAP EPS of C$1.97, despite a 10.5% year-over-year revenue decline to C$11.28 billion, indicating resilience in profitability amidst market fluctuations and reflecting operational stability.
- Production Capacity Growth: The quarterly upstream production reached 444,000 gross oil-equivalent barrels per day, marking the highest annual production of 438,000 barrels per day in over 30 years, showcasing significant advancements in resource development and production efficiency that enhance market competitiveness.
- Increased Shareholder Returns: The company returned C$2.072 billion to shareholders in the quarter, including C$361 million in dividend payments and C$1.711 billion in share repurchases, demonstrating a strong commitment to shareholder value and effective cash flow management.
- Dividend Growth: The quarterly dividend increased by 20% from 72 cents to 87 cents per share, which not only boosts investor confidence but may also attract more long-term investors, further solidifying the company's capital structure.
See More
