Bore Family Office
Valuation Report — Chevron Corporation (CVX) • March 6, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.58% • Current Price: $189.94
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Chevron Corporation is the second-largest American integrated oil and gas company (after ExxonMobil), operating across the full energy value chain: upstream exploration and production, downstream refining and marketing, and midstream transport. Founded in 1879 as Pacific Coast Oil, Chevron has operations in more than 180 countries. The 2023 announcement of the Hess Corporation acquisition ($53B) — pending completion — will add significant deepwater Guyana assets to Chevron's portfolio, creating one of the most compelling long-term upstream growth stories in the industry.
The company runs an asset-light approach to operations relative to fully integrated peers, focusing on high-return upstream assets (Permian Basin, Kazakhstan's Tengiz field, deepwater Gulf of Mexico) and maintaining best-in-class capital discipline. CVX returned $28.1B to shareholders in FY2025 (dividends + buybacks) despite a challenging oil price environment.
| Segment |
Description |
% of EBIT |
Key Assets |
Growth Outlook |
| Upstream (US) | Permian Basin, Gulf of Mexico, shale | ~40% | Permian (1.7M boe/d target) | +5-7%/yr |
| Upstream (International) | Kazakhstan Tengiz, Australia LNG, West Africa | ~45% | Tengiz ($49B FGP project complete) | +8% near-term (Tengiz ramp) |
| Downstream (Refining) | Refining, chemicals, lubricants | ~10% | Richmond CA, El Segundo CA | Flat / margin-driven |
| Hess (pending) | Guyana deepwater (Stabroek block, 30% interest) | ~5% | Guyana: 11B+ barrels estimated resource | High growth through 2035 |
The Tengizchevroil Future Growth Project (FGP) in Kazakhstan — Chevron's $49B mega-project — ramped up in 2025, adding significant production volumes. This drove FY2025 production growth but also elevated capex. The Hess acquisition arbitration with ExxonMobil regarding Guyana preferential rights remains a key overhang — if CVX loses, the strategic rationale for the Hess deal is significantly impaired.
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|
| Revenue ($M) | $155,606 | $235,717 | $196,913 | $193,414 | $184,432 |
| EBITDA ($M) | $33,417 | $55,974 | $43,343 | $36,004 | $36,493 |
| Operating Income ($M) | $15,492 | $39,655 | $26,017 | $18,722 | $16,361 |
| Net Income ($M) | $15,625 | $35,465 | $21,369 | $17,661 | $12,299 |
| EPS (diluted) | $8.14 | $18.28 | $11.36 | $9.72 | $6.63 |
| Free Cash Flow ($M) | $21,131 | $37,628 | $19,780 | $15,044 | $16,592 |
| Annual DPS | $5.310 | $5.680 | $6.040 | $6.520 | $6.840 |
| Total Debt ($M) | $31,369 | $23,339 | $20,836 | $24,541 | $40,758 |
| Rev YoY Growth | — | +51.5% | -16.5% | -1.8% | -4.6% |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|
| Risk-Free Rate (Rf) | 4.35% | 10-yr US Treasury yield |
| Beta (β) | 0.900 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 9.30% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 3.00% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 1.90% | × (1 − 37%) |
| Weight Equity (We) | 90.3% | Mkt cap $0.0B |
| Weight Debt (Wd) | 9.7% | Gross debt $0.0B |
| WACC | 8.58% | DCF discount rate |
📈 DCF Scenarios
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $20.20B | $18.60B | $18.60B |
| Year 2 | Stage 1 | $20.40B | $17.31B | $35.91B |
| Year 3 | Stage 1 | $20.61B | $16.10B | $52.01B |
| Year 4 | Stage 1 | $20.81B | $14.97B | $66.98B |
| Year 5 | Stage 1 | $21.02B | $13.93B | $80.91B |
| Year 6 | Stage 2 | $21.13B | $12.89B | $93.80B |
| Year 7 | Stage 2 | $21.23B | $11.93B | $105.73B |
| Year 8 | Stage 2 | $21.34B | $11.04B | $116.78B |
| Year 9 | Stage 2 | $21.44B | $10.22B | $127.00B |
| Year 10 | Stage 2 | $21.55B | $9.46B | $136.46B |
| Terminal | — | TV=$309.0B | PV(TV)=$135.6B (50% of EV) | EV=$272.1B |
Base Scenario
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $20.80B | $19.16B | $19.16B |
| Year 2 | Stage 1 | $21.63B | $18.35B | $37.50B |
| Year 3 | Stage 1 | $22.50B | $17.57B | $55.08B |
| Year 4 | Stage 1 | $23.40B | $16.83B | $71.91B |
| Year 5 | Stage 1 | $24.33B | $16.12B | $88.04B |
| Year 6 | Stage 2 | $24.94B | $15.22B | $103.26B |
| Year 7 | Stage 2 | $25.56B | $14.37B | $117.62B |
| Year 8 | Stage 2 | $26.20B | $13.56B | $131.19B |
| Year 9 | Stage 2 | $26.86B | $12.80B | $143.99B |
| Year 10 | Stage 2 | $27.53B | $12.09B | $156.08B |
| Terminal | — | TV=$464.1B | PV(TV)=$203.8B (57% of EV) | EV=$359.8B |
Bull Scenario
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|
| Year 1 | Stage 1 | $21.40B | $19.71B | $19.71B |
| Year 2 | Stage 1 | $22.90B | $19.42B | $39.13B |
| Year 3 | Stage 1 | $24.50B | $19.14B | $58.27B |
| Year 4 | Stage 1 | $26.22B | $18.86B | $77.13B |
| Year 5 | Stage 1 | $28.05B | $18.59B | $95.72B |
| Year 6 | Stage 2 | $29.31B | $17.89B | $113.61B |
| Year 7 | Stage 2 | $30.63B | $17.22B | $130.82B |
| Year 8 | Stage 2 | $32.01B | $16.57B | $147.39B |
| Year 9 | Stage 2 | $33.45B | $15.95B | $163.34B |
| Year 10 | Stage 2 | $34.96B | $15.35B | $178.69B |
| Terminal | — | TV=$645.3B | PV(TV)=$283.3B (61% of EV) | EV=$462.0B |
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|
| 6.6% | $230 | $247 | $270 | $298 | $335 |
| 7.1% | $207 | $221 | $238 | $259 | $286 |
| 7.6% | $188 | $199 | $213 | $229 | $250 |
| 8.1% | $172 | $181 | $192 | $205 | $221 |
| 8.6% | $158 | $166 | $175 | $185 | $197 |
| 9.1% | $146 | $153 | $160 | $168 | $178 |
| 9.6% | $136 | $141 | $147 | $154 | $162 |
| 10.1% | $127 | $131 | $136 | $142 | $149 |
| 10.6% | $119 | $122 | $127 | $132 | $137 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | EV/EBITDA | P/FCF | Div Yield | WACC | FCF/Share |
|---|
| CVX (Current) | 11.8x | 21.3x | 3.60% | 8.6% | $8.94 |
| XOM (ExxonMobil) | 10.2x | 19.5x | 3.50% | 8.4% | $8.22 |
| COP (ConocoPhillips) | 8.5x | 14.1x | 3.10% | 9.2% | $7.05 |
| SHEL (Shell) | 5.8x | 12.0x | 4.20% | 9.0% | $6.40 |
| CVX 5yr Avg | 8.5x | 15.0x | 4.00% | — | — |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|
| Annual DPS | $6.840 |
| Current Yield | 3.60% |
| Consecutive Growth Years | 38 |
| 1-yr DPS CAGR | +4.9% |
| 3-yr DPS CAGR | +6.5% |
| 5-yr DPS CAGR | +5.2% |
| 10-yr DPS CAGR | +6.5% |
| Payout Ratio (DPS/EPS) | 88.1% ⚠️ |
| FCF Payout Ratio | 41.2% |
| Sustainability Verdict | ✅ Safe — Oil Price Sensitive |
CVX dividend is safe at normalized oil prices. FCF payout ratio ~41% at $70+ WTI. 38-year Dividend Aristocrat — management has never cut through multiple oil cycles. On FY2025 EPS basis ($6.63), payout ratio appears elevated (103%) but is misleading — FY2025 EPS was depressed by low oil prices. Normalized EPS at $70 WTI ≈ $9-11, giving a payout ratio of ~62-76%. Balance sheet supports dividend even through a low oil price cycle: $6.3B cash, $33.9B operating cash flow. Annual income from position: $6.84 × 1,430 shares = $9,781/yr.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2021 | $8.14 | — | — | — | Actual |
| 2022 | $18.28 | — | — | — | Actual |
| 2023 | $11.36 | — | — | — | Actual |
| 2024 | $9.72 | — | — | — | Actual |
| 2025 | $6.63 | — | — | — | Actual |
| 2026 | $4.61 | $6.72 | $8.51 | 28 | Estimate |
| 2027 | $6.07 | $9.19 | $13.24 | 27 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| 2021 | $0.2B | — | — | — | Actual |
| 2022 | $0.2B | — | — | — | Actual |
| 2023 | $0.2B | — | — | — | Actual |
| 2024 | $0.2B | — | — | — | Actual |
| 2025 | $0.2B | — | — | — | Actual |
| 2026 | $0.2B | $0.2B | $0.2B | 28 | Estimate |
| 2027 | $0.2B | $0.2B | $0.2B | 27 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $177.37 | Range $124–$210
| Analyst | Firm | Rating | PT | Upside |
|---|
| Alastair Syme | Citigroup | Strong Buy | $210 | +10.6% |
| Jean Ann Salisbury | B of A Securities | Strong Buy | $206 | +8.5% |
| Sam Margolin | Wells Fargo | Buy | $204 | +7.4% |
| Devin McDermott | Morgan Stanley | Buy | $174 | -8.4% |
| Betty Jiang | Barclays | Hold | $166 | -12.6% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|
| Q4 2025 | $1.48 vs $1.44 | +$0.04 ✅ | $0.0B vs $0.0B | +$0.0B ✅ | FY2026 capex $14.5-15.5B (reduced) |
| Q3 2025 | $1.71 vs $1.68 | +$0.03 ✅ | $0.0B vs $0.0B | +$0.0B ✅ | Buybacks maintained |
| Q2 2025 | $2.55 vs $2.50 | +$0.05 ✅ | $0.0B vs $0.0B | +$0.0B ✅ | Maintained guidance |
| Q1 2025 | $2.68 vs $2.62 | +$0.06 ✅ | $0.0B vs $0.0B | +$0.0B ✅ | Maintained capex |
(e) Confidence Band Commentary
CVX analyst estimates have a very wide range — EPS FY2026 spans $4.61 to $8.51. This reflects pure oil price uncertainty, not business model risk. At $70 WTI, consensus $6.72 is achievable. At $60 WTI, $4.61 is realistic. FY2027 has an even wider range ($6.07 to $13.24), reflecting 2-year oil price uncertainty and Hess asset ramp assumptions. CVX is an oil price call — and the current stock price at $189.94 implies more optimism than analyst consensus ($177.37).
💡 Investment Thesis
Bull case: Tengiz FGP ramp delivers meaningful production volume growth through 2026. Hess acquisition closes (Guyana arbitration resolved favorably), adding 11B+ barrel deepwater resource at ~$10-15/boe breakeven. CVX's Permian Basin reaches 1.7M boe/d target by 2027. At $75+ WTI, FCF surges to $22-25B, supporting $15B+ annual buybacks (5%+ annual share count reduction) plus 4%+ yield. Bull IV: $230. The combination of Permian growth, Tengiz, and Hess Guyana makes CVX a compelling compounding machine in a $75+ oil world.
Bear case: CVX is trading at $189.94 — 7% ABOVE analyst consensus PT of $177.37. The consensus is effectively saying "sell here." At $60 WTI (possible if global recession/demand collapse), FCF drops to $12-14B, buybacks slow, and the dividend payout ratio balloons to 100%+ on EPS. Hess arbitration risk is real — if Exxon wins preferential rights in Guyana, CVX paid $53B for a non-core oil company at peak. Bear IV: $128. Downside is significant if oil rolls over.
Key assumptions — Base case: Normalized FCF $20B (at ~$70-72 WTI), modest 4% annual FCF growth (Tengiz production, moderate oil prices), WACC 8.58%, terminal growth 2.5%. Base IV $175.32 validates that CVX is overvalued by ~8% at current prices vs. our model.
Position view: Joseph holds 1,430 shares at $149.19 cost ($59.9K unrealized gain, +27.3%). At $189.94, we recommend holding but not adding. The position is generating $9,781/yr in dividends. Trim 20–25% of position above $195–200 (close to Bull IV territory).
⚖️ DCF Verdict: Hold — Chevron Corporation (CVX)
Current price: $189.94 | Analyst Avg PT: $177.37
| Tier | Price | Action |
|---|
| Tier 1 — Starter | ≤$174 | Begin position |
| Tier 2 — Add | ≤$158 | Add on weakness |
| Tier 3 — Full | ≤$145 | Full allocation |
| Sell Alert | ≥$215 | Above fair value — consider trimming |
Hold. Do not add at current levels. Current price is above fair value and above analyst consensus.
- Base IV: $175.32 | Analyst consensus PT: $177.37 | Current price: $189.94 → ~8% overvalued
- 19 analysts with Buy consensus, but average PT $177.37 — the market has run ahead of fundamentals
- 27% unrealized gain from $149.19 cost — protect this gain with a trailing stop or planned trim
- Trim opportunity: $195–200 range (close to Bull IV $230 × 0.85)
- Re-entry zone: $174 (starter) / $158 (add) / $145 (full conviction)
- Thesis breaks if: Hess arbitration resolved against CVX (meaningful negative catalyst) OR oil stays below $60 for 12+ months
- Key watch: Kazakhstan Tengiz FGP production ramp (weekly production reports), WTI oil price
CVX is a world-class oil major with a 38-year dividend growth streak and excellent capital allocation. But at $190, you're paying for $75 oil optimism in a $68 oil market. Wait for a pullback to add more.
📂 Current Position Summary
| Metric | Value |
|---|
| Shares Held | 1,429.82 |
| Average Cost Basis | $149.19 |
| Current Market Value | $271,580 |
| Unrealized P&L | $+58,265 (+27.3%) |
| Annual Dividend Income | $9,780/yr |
| Yield on Cost | 4.58% |
| vs Target Position (~$200K) | $271,580 vs $200,000 (136% of target) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
