CVX changes
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- Price
- $210.78
- Discount category
- Close to intrinsic value
- Next earnings
- 2027-01-29
- Next earnings is estimate
- Yes
- Company name
- Chevron
- Sector
- Integrated oil & gas
- About
- Chevron is one of the largest integrated energy companies. Its upstream business produces crude oil and natural gas in the United States (the Permian Basin, the Gulf of America, the Bakken and the DJ Basin) and in other countries such as Kazakhstan (through its 50% share of Tengizchevroil), Australia, Guyana, Israel and Venezuela. Its downstream business refines crude oil into fuels and sells fuels, lubricants and chemicals, partly through the CPChem and GS Caltex joint ventures. It bought Hess Corporation on July 18, 2025, which added a share of the Stabroek block in Guyana. In the first nine months of 2026, net production was 3.97 million barrels of oil equivalent per day, and U.S. production was above 2 million barrels per day. Earnings move strongly with oil prices: each $1 change in the Brent price changes annual after-tax earnings by about $600 million.
- Thesis
- Chevron trades at a premium because investors pay for high cash flow in a period of high oil prices and for a strong balance sheet. Brent averaged $94 per barrel in the first nine months of 2026, against $71 a year earlier, because the conflict in the Middle East disrupted supplies. Chevron's adjusted earnings rose to $25.1 billion in that period, from $10.5 billion. Net debt fell to $20.7 billion, its bonds are rated AA- and Aa2, and it pays a dividend of $1.78 per quarter and buys back about $2.5 billion to $3.0 billion of shares each quarter. Investors also pay for growth from Hess's share of Guyana, record U.S. refinery runs and Venezuela, where its joint ventures plan to invest $7 billion over five years. For the premium to be earned, earnings must stay high when oil prices fall back. Production growth, lower costs and better Bakken midstream terms must lift quarterly earnings at normal prices to more than the $3.0 billion of Q4 2025, when Brent averaged $64. The Hess Midstream restructuring must close by the end of 2026, and buybacks must continue near the guided pace. The Q4 2026 report in late January 2027 and the 2027 capital budget are the next tests. The premium can shrink fast if the conflict eases and oil prices fall, or if refining margins return to normal.
- Risks
- Earnings depend on oil prices. Each $1 change in Brent changes annual after-tax earnings by about $600 million. Brent averaged $94 in the first nine months of 2026 because of the conflict in the Middle East. If the conflict ends or supply grows, prices can fall quickly toward the $64 of Q4 2025. The conflict in the Middle East can also hurt operations. It caused production curtailments in the Partitioned Zone between Saudi Arabia and Kuwait and at CPChem plants in Saudi Arabia and Qatar, and it raised shipping and insurance costs. Chevron works in countries with political risk. Its Venezuela joint ventures depend on US government authorizations and sanctions. Tengiz exports go through the Caspian Pipeline Consortium, which drone attacks have hit. Legal claims can add costs. A Louisiana jury verdict under the coastal law SLCRMA is under appeal, and Chevron recorded legal reserves in Q1 and Q3 2026.
- Balance sheet
- Cash: $12.8B Debt: $33.5B Net debt: $20.7B Undrawn credit line: $11.4B Debt due within 12 months: $9.6B Ratings: S&P AA-, Moody's Aa2 Chevron funds itself with bonds and commercial paper. At September 30, 2026, total debt and finance lease liabilities were $33.5 billion, down from $40.8 billion at December 31, 2025, and cash, cash equivalents and marketable securities were $12.8 billion, so net debt was $20.7 billion. Net debt was 0.4 times cash flow from operations of the last 12 months ($52.0 billion). Commercial paper was $0.8 billion. Debt due within one year was $9.6 billion, of which $8.9 billion is classified as long-term, because Chevron can refinance it with $11.4 billion of undrawn 364-day committed credit facilities. S&P rates Chevron's bonds AA- and Moody's rates them Aa2. When the Hess Midstream deal closes, about $3.7 billion of Hess Midstream debt leaves the balance sheet. In the first nine months of 2026, free cash flow was $28.5 billion, and Chevron paid $10.5 billion of dividends and $8.2 billion for its own shares. As of 2026-09-30.
- Checkpoints
- Dec 2026 (estimate): Hess Midstream restructuring closes. Pending. Watch: A close by the end of 2026 with the planned cut of about 50% in Bakken midstream costs passes; a delay or worse terms fails. Jan 29, 2027 (estimate): Q4 2026 results and 2027 plans. Pending. Watch: Steady production, buybacks near $2.5 billion to $3.0 billion a quarter and a 2027 capital budget that keeps free cash flow high at lower prices pass; lower buybacks or a large rise in costs fail.
- Recent events
- 2026-10-30: Chevron reported Q3 2026 results. Earnings were $9.9 billion, and adjusted earnings were $10.4 billion, or $5.28 per share, with Brent at an average of $97 per barrel. Cash flow from operations was $16.0 billion, and free cash flow was $12.0 billion. U.S. refineries had record crude throughput at 98% utilization. Total debt fell by $3.5 billion and net debt by $7.8 billion in the quarter. Chevron bought back $2.5 billion of shares and expects $2.5 billion to $3.0 billion in Q4 2026. Its Venezuela joint ventures plan to invest $7 billion over the next five years. 2026-10-06: Chevron agreed to transfer its interests in Hess Midstream and its DJ Basin crude oil midstream assets to Hess Midstream, for $200 million in cash and new long-term Bakken contracts that cut its Bakken midstream costs by about 50%. Chevron expects an after-tax loss of about $3 billion to $4 billion on closing, which it will treat as a special item, and it will remove about $3.7 billion of Hess Midstream debt from its balance sheet. The deal is expected to close by the end of 2026. 2026-09-30: Chevron's board named Jeff Gustavson, the head of New Energies, as Chief Financial Officer from January 1, 2027. The current CFO, Eimear Bonner, becomes President of Oil, Products & Gas. 2026-09-01: Chevron started to use equity accounting for its Venezuela joint ventures, after better fiscal, commercial and legal terms. It now records its share of their earnings, production and reserves. 2026-07-31: Chevron reported Q2 2026 results. Earnings were $12.1 billion, U.S. production was a record and worldwide production rose 20% from a year earlier. Chevron signed a 20-year power agreement with Microsoft for a West Texas data center. 2026-05-01: Chevron reported Q1 2026 results. Earnings were $2.2 billion and adjusted earnings were $2.8 billion, as rising oil prices caused negative timing effects of derivatives and a legal reserve of $360 million lowered earnings. It returned $6.0 billion to shareholders. 2026-01-30: Chevron reported 2025 results. Adjusted earnings were $13.5 billion, or $7.29 per share, with Brent at an average of $69 per barrel. Production rose 12% to a record, helped by Hess. It raised the quarterly dividend 4% to $1.78 per share.