Refining is having a moment, and two of the biggest names in energy are about to show it off. TD Cowen analyst Jason Gabelman on Monday raised his price forecasts for Chevron Corporation (CVX) and ExxonMobil Holdings (XOM), and he thinks both companies will beat third-quarter estimates when they report.

Chevron: Gabelman kept a Hold rating but nudged his price forecast from $205 to $215. His reasoning: Chevron has outperformed quarter to date following its Venezuela expansion announcement, with the asset expected to be equity accounted going forward. He estimates it could generate about $1 billion in free cash flow once production reaches 600,000 boe/d.

Even with a $1.50-per-share timing headwind, Gabelman expects Chevron to beat third-quarter estimates. Attention is also expected to remain on total cost of ownership (TCO), amid reports that a contract extension could require a large one-time payment and additional project equity.

He also expects an update on Kilby following a permitting pause in Texas and progress on additional projects, but does not expect Chevron to increase its buyback this quarter.

On the numbers, Gabelman estimates Upstream earnings to decline $1.2 billion quarter over quarter, or remain flat excluding timing headwinds. Lower commodity prices and Guyana shifting to profit oil are expected to reduce earnings by $0.2 billion each, offset by higher production excluding Guyana and TCO, plus lower TCO withholding taxes.

Downstream earnings are expected to fall $1.2 billion quarter over quarter, or rise $0.5 billion excluding timing impacts. Higher refining margins are estimated to add about $1 billion, partly offset by $0.2 billion from lower chemicals earnings and $0.4 billion from the removal of estimated second-quarter trading benefits.

ExxonMobil: Gabelman maintained a Buy rating and boosted his price forecast from $168 to $180. Exxon Mobil has underperformed during the Middle East conflict due to its outsized exposure to disrupted volumes, he writes.

He expects third-quarter results to beat consensus, supported by strong refining performance, while cash flow is also expected to exceed estimates despite a $2 billion timing headwind.

The analyst said he is watching for signs that Exxon may accelerate Permian production growth following a series of midstream agreements, including its deal with Targa Resources. Attention will also focus on updates on Qatari LNG repairs and whether management remains comfortable with its concentrated LNG portfolio.

For the quarter, Gabelman estimates upstream earnings to decline $0.6 billion quarter over quarter, with commodity prices and production each contributing $0.3 billion of pressure. The production impact is mainly due to Guyana shifting from cost to profit oil, while the commodity estimate includes a $0.4 billion benefit from normalized U.S. gas realizations.

Energy Products earnings are estimated to increase $4.6 billion, driven mainly by higher margins, along with $0.3 billion from lower maintenance and $0.2 billion from lower costs. Chemicals earnings are expected to decline $0.5 billion and Specialty earnings $0.1 billion due to weaker margins.

Price Action: Chevron shares were up 1.07% at $206.64 and ExxonMobil Holdings shares were up 1.03% at $162.25 at the time of publication on Monday, according to market data.