CVX
CVX
Hold 2026-04-22
Model
DCF
Price at Report
$185.98
Base IV
$189.37
Bear IV
$138.68
Bull IV
$243.36
Entry Zone: 135-165 · Sell Above: 215
Bore Family Office
Valuation Report — Chevron Corporation (CVX) • April 22, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 7.65% • Current Price: $185.98
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Chevron is the second-largest US integrated oil major, operating across upstream (exploration & production), midstream (transport), and downstream (refining & chemicals). Founded in 1879 as Pacific Coast Oil, Chevron has built one of the industry's strongest balance sheets and most disciplined capital allocation records.
FY2025 was a transition year: earnings declined 30% to $6.63 EPS as oil prices softened, but the Hess acquisition closed (adding ~300K boe/d of Guyana production) and the company maintained its $17.5B buyback program. Long-term debt jumped from $20B to $38B to finance the Hess deal, though management has committed to rapid deleveraging. Chevron has increased its dividend for 38 consecutive years.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Upstream | $82,000M | 44% | -3.0% | 28.0% | Oil & gas E&P — core FCF driver; Guyana addition |
| Downstream | $102,000M | 56% | -6.0% | 4.0% | Refining & chemicals — low margin, cyclical |
| Blended Growth Rate | — | 100% | -4.7% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Capital Return: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.6% | <8% weak |
| FCF Margin | 9.0% | 5–10% adequate |
| Debt / EBITDA | 1.0x | ≤2x conservative |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Contracting | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $155,606 | $235,717 | $196,913 | $193,414 | $184,432 |
| Rev YoY Growth | — | +51.5% | -16.5% | -1.8% | -4.6% |
| Gross Margin | 40.7% | 38.3% | 39.5% | 38.4% | 41.3% |
| EBITDA ($M) | $33,417 | $55,974 | $43,343 | $36,004 | $36,493 |
| EBITDA Margin | 21.5% | 23.7% | 22.0% | 18.6% | 19.8% |
| Operating Income ($M) | $15,492 | $39,655 | $26,017 | $18,722 | $16,361 |
| Operating Margin | 10.0% | 16.8% | 13.2% | 9.7% | 8.9% |
| Net Income ($M) | $15,625 | $35,465 | $21,369 | $17,661 | $12,299 |
| Net Margin | 10.0% | 15.0% | 10.9% | 9.1% | 6.7% |
| 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) | $31,113 | $21,375 | $20,307 | $20,135 | $37,953 |
💹 Capital Return & Share Count Analysis
Net Share Change
-3.3% (2021→2025)
📉 Net reduction — buybacks exceed issuances
EPS Amplification
EPS grew -18.6% vs net income -21.3% over the period — +2.7pp of EPS growth amplified by share reduction.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 1920.0M | — | $3,800 | 1.1% |
| 2022 | 1940.0M | +1.0% | $12,600 | 3.5% |
| 2023 | 1880.0M | -3.1% | $17,500 | 5.0% |
| 2024 | 1817.0M | -3.4% | $17,500 | 5.2% |
| 2025 | 1856.0M | +2.1% | $17,500 | 5.1% |
Chevron's buyback pace has been consistent at ~$17.5B/yr. The share count increase in 2025 (1.856B vs 1.817B) is due to the Hess acquisition share issuance. Prior to Hess, buybacks reduced shares by ~5% over 3 years.
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.520 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.11% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.40% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.48% | × (1 − 21%) |
| Weight Equity (We) | 90.7% | Mkt cap $0.0B |
| Weight Debt (Wd) | 9.3% | Gross debt $0.0B |
| WACC | 7.65% | DCF discount rate |
📈 DCF Scenarios
$139
🔴 Bear
$189
📊 Base
$243
🚀 Bull
$185.98
Current Price
$188
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 0.0% | 0.0% | 2.0% | 8.65% | $139 | ▼25.4% |
| 📊 Base | 3.0% | 2.0% | 2.5% | 7.65% | $189 | ▲1.8% |
| 🚀 Bull | 6.0% | 3.5% | 3.0% | 7.15% | $243 | ▲30.9% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 0.0% | Stage 2: 0.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $17.00B | $15.65B | $15.65B |
| Year 2 ✦ | Stage 1 | $18.00B | $15.25B | $30.89B |
| Year 3 ✦ | Stage 1 | $19.20B | $14.97B | $45.86B |
| Year 4 ✦ | Stage 1 | $20.50B | $14.71B | $60.57B |
| Year 5 ✦ | Stage 1 | $22.00B | $14.53B | $75.11B |
| Year 6 | Stage 2 | $22.00B | $13.37B | $88.48B |
| Year 7 | Stage 2 | $22.00B | $12.31B | $100.79B |
| Year 8 | Stage 2 | $22.00B | $11.33B | $112.12B |
| Year 9 | Stage 2 | $22.00B | $10.43B | $122.54B |
| Year 10 | Stage 2 | $22.00B | $9.60B | $132.14B |
| Terminal | — | TV=$337.4B | PV(TV)=$147.2B (53% of EV) | EV=$279.3B |
| Intrinsic Value | — | — | EV $279.3B − Net Debt → Equity / Shares | $139 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.65%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $337.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $147.2B). Enterprise Value = PV of FCFs ($132.1B) + PV of TV ($147.2B) = $279.3B. Subtracting net debt gives equity value of $257.4B, divided by shares outstanding = $139 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $17.00B | $15.79B | $15.79B |
| Year 2 ✦ | Stage 1 | $18.00B | $15.53B | $31.32B |
| Year 3 ✦ | Stage 1 | $19.20B | $15.39B | $46.72B |
| Year 4 ✦ | Stage 1 | $20.50B | $15.27B | $61.98B |
| Year 5 ✦ | Stage 1 | $22.00B | $15.22B | $77.20B |
| Year 6 | Stage 2 | $22.44B | $14.42B | $91.62B |
| Year 7 | Stage 2 | $22.89B | $13.66B | $105.28B |
| Year 8 | Stage 2 | $23.35B | $12.95B | $118.22B |
| Year 9 | Stage 2 | $23.81B | $12.27B | $130.49B |
| Year 10 | Stage 2 | $24.29B | $11.62B | $142.11B |
| Terminal | — | TV=$483.4B | PV(TV)=$231.3B (62% of EV) | EV=$373.4B |
| Intrinsic Value | — | — | EV $373.4B − Net Debt → Equity / Shares | $189 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.65%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $483.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $231.3B). Enterprise Value = PV of FCFs ($142.1B) + PV of TV ($231.3B) = $373.4B. Subtracting net debt gives equity value of $351.5B, divided by shares outstanding = $189 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 6.0% | Stage 2: 3.5% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $17.00B | $15.87B | $15.87B |
| Year 2 ✦ | Stage 1 | $18.00B | $15.68B | $31.54B |
| Year 3 ✦ | Stage 1 | $19.20B | $15.61B | $47.15B |
| Year 4 ✦ | Stage 1 | $20.50B | $15.55B | $62.70B |
| Year 5 ✦ | Stage 1 | $22.00B | $15.58B | $78.28B |
| Year 6 | Stage 2 | $22.77B | $15.05B | $93.32B |
| Year 7 | Stage 2 | $23.57B | $14.53B | $107.86B |
| Year 8 | Stage 2 | $24.39B | $14.04B | $121.90B |
| Year 9 | Stage 2 | $25.25B | $13.56B | $135.46B |
| Year 10 | Stage 2 | $26.13B | $13.10B | $148.55B |
| Terminal | — | TV=$648.5B | PV(TV)=$325.1B (69% of EV) | EV=$473.6B |
| Intrinsic Value | — | — | EV $473.6B − Net Debt → Equity / Shares | $243 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.15%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $648.5B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $325.1B). Enterprise Value = PV of FCFs ($148.6B) + PV of TV ($325.1B) = $473.6B. Subtracting net debt gives equity value of $451.7B, divided by shares outstanding = $243 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.6% | $230 | $253 | $285 | $328 | $392 |
| 6.1% | $203 | $221 | $244 | $274 | $315 |
| 6.7% | $178 | $191 | $207 | $228 | $255 |
| 7.1% | $164 | $175 | $188 | $205 | $226 |
| 7.6% | $150 | $158 | $169 | $181 | $197 |
| 8.2% | $135 | $142 | $150 | $159 | $171 |
| 8.6% | $127 | $132 | $139 | $147 | $157 |
| 9.1% | $117 | $122 | $128 | $134 | $142 |
| 9.7% | $108 | $112 | $116 | $121 | $127 |
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
| Metric | CVX | XOM | BP | SHEL | 5yr Avg (CVX) |
|---|---|---|---|---|---|
| P/E (NTM) | 21.5x | 14.8x | 74.0x | 11.2x | 14.5x |
| EV/EBITDA | 7.4x | 6.8x | 6.2x | 5.1x | 6.9x |
| P/FCF | 11.2x | 10.1x | 7.6x | 8.9x | 9.5x |
| Div Yield | 3.7% | 3.2% | 0.7% | 3.5% | 4.0% |
| PEG | 1.7x | 1.2x | N/M | 0.8x | 1.1x |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $6.840 |
| Current Yield | 3.68% |
| Consecutive Growth Years | 38 |
| 1-yr DPS CAGR | +4.9% |
| 3-yr DPS CAGR | +4.3% |
| 5-yr DPS CAGR | +5.2% |
| 10-yr DPS CAGR | +4.7% |
| Payout Ratio (DPS/EPS) | 103.1% ⚠️ |
| FCF Payout Ratio | 76.5% |
| Sustainability Verdict | Watch |
Chevron's 38-year dividend growth streak is a crown jewel, but FY2025 payout ratio exceeds 100% on depressed earnings. FCF payout of 76.5% is manageable but elevated. The dividend is safe — management prioritizes it above buybacks — but growth may slow to 3-4% until earnings recover.
🔮 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 | $8.64 | $16.41 | 28 | Estimate |
| 2027 | $6.07 | $9.64 | $15.05 | 27 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $155.6B | — | — | — | Actual |
| 2022 | $235.7B | — | — | — | Actual |
| 2023 | $196.9B | — | — | — | Actual |
| 2024 | $193.4B | — | — | — | Actual |
| 2025 | $184.4B | — | — | — | Actual |
| 2026 | $176.4B | $217.9B | $291.7B | 28 | Estimate |
| 2027 | $177.6B | $208.7B | $248.0B | 27 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $187.52 | Range $124–$242
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Alastair Syme | Citigroup | Strong Buy | $235 | +26.4% |
| Sam Margolin | Wells Fargo | Buy | $222 | +19.4% |
| Biraj Borkhataria | RBC Capital | Buy | $220 | +18.3% |
| Devin McDermott | Morgan Stanley | Buy | $212 | +14.0% |
| Lucas Herrmann | BNP Paribas | Buy | $174 | -6.4% |
(e) Confidence Band Commentary
The analyst community is bullish on CVX with a Buy consensus and an average PT near the current price. The EPS range for FY2026 ($4.61 to $16.41) is extreme, reflecting oil price uncertainty. Most analysts see the Hess acquisition as accretive by 2027. The stock appears fairly valued at consensus — upside requires commodity recovery or successful Hess integration.
💡 Investment Thesis
- Bull case: The Hess acquisition adds 300K+ boe/d of low-cost Guyana production at a break-even below $35/bbl. Oil recovers to $80+ and CVX's FCF surges to $25B+, enabling accelerated buybacks and dividend growth above 5%. Deleveraging happens faster than expected.
- Bear case: Oil stays in the $60s. The Hess debt ($18B) weighs on the balance sheet longer than expected. Refining margins remain compressed. CVX trades at a premium to XOM without delivering premium returns.
- Key assumption: Guyana production ramps as planned — 1.2M boe/d by 2027. This is the single most important driver of CVX's earnings recovery.
- Catalyst: Q2 2026 earnings will show the first full quarter of Hess contribution. If production ramps on schedule, expect upward EPS revisions.
- Risk: The 38-year dividend growth streak is a double-edged sword — management will protect it at all costs, which may mean slower buybacks if oil dips.
👔 Management Quality & Culture
CEO: Roundtable Previously · Tenure: Since 2018 (~8 yrs)
Net Insider Buys (12m)
-2,083,772 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
History of Chevron CEOs
Demetrius G. Scofield served as the first CEO of Standard Oil Co. of California (later Chevron).
Demetrius G. Scofield served as the first CEO of Standard Oil Co. of California (later Chevron).
Chevron Leadership — Chevron
Mark A. Nelson*^ Vice Chairman Eimear P. Bonner*^ Chief Financial Officer T. Ryder Booth*^ Chief Technology and Engineering Officer Jeff B. Gustavson*^ President, New Energies R. Hewitt Pate*^ Chief Legal Officer Robert Clay Neff^ President
Mark A. Nelson*^ Vice Chairman Eimear P. Bonner*^ Chief Financial Officer T. Ryder Booth*^ Chief Technology and Engineering Officer Jeff B. Gustavson*^ President, New Energies R. Hewitt Pate*^ Chief Legal Officer Robert Clay Neff^ President
John Watson Named Chairman and CEO of Chevron Corporation |
Chevron Research Co. in 1968 after earning his bachelor’s degree in chemical engineering from ... Dublin. Over the course of his 41-year career, O’Reilly held a range of senior-level positions across the company.
Chevron Research Co. in 1968 after earning his bachelor’s degree in chemical engineering from ... Dublin. Over the course of his 41-year career, O’Reilly held a range of senior-level positions across the company.
Capital Allocation & Strategy
2025 Annual Report: Strategy & Performance
Access Chevron’s annual report to view financial outcomes, company highlights and strategic direction, plus download the full report.
Access Chevron’s annual report to view financial outcomes, company highlights and strategic direction, plus download the full report.
1 © 2025 Chevron 3GP at TCO Fourth quarter 2024 earnings cal
The impact of the acquisition of PDC Energy on proved reserves remains positive due to · reserves additions from extensions and newly identified proved undeveloped well ... Chevron earnings: 2024 vs. 2023
The impact of the acquisition of PDC Energy on proved reserves remains positive due to · reserves additions from extensions and newly identified proved undeveloped well ... Chevron earnings: 2024 vs. 2023
Employee Ratings
Overall Rating
3.7/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- good pay
- recommend
Employee Review Excerpts
Chevron Reviews (5,655): Pros & Cons of Working At Chevron |
Chevron has an employee rating of 3.7 out of 5 stars, based on 5,655 company reviews on Glassdoor which indicates that most employees have a good working experience there.
Chevron has an employee rating of 3.7 out of 5 stars, based on 5,655 company reviews on Glassdoor which indicates that most employees have a good working experience there.
Awesome place - Sales Chevron Employee Review
Chevron reviews · 5.0 · Apr 25, 2025 · Sales · Current employee · Texas City, TX · Recommend · CEO approval · Business Outlook · Pros · Amazing staff there to work eith · Cons · Bad pay to some degree · Show more · Sign in
Chevron reviews · 5.0 · Apr 25, 2025 · Sales · Current employee · Texas City, TX · Recommend · CEO approval · Business Outlook · Pros · Amazing staff there to work eith · Cons · Bad pay to some degree · Show more · Sign in
okay - Engineer Chevron Employee Review
Chevron reviews · 3.0 · Aug 22, 2025 · Engineer · Former employee · Houston, TX · Recommend · CEO approval · Business Outlook · Pros · stable, good pay and growth opportunity · Cons · way too political and red tape · Show m
Chevron reviews · 3.0 · Aug 22, 2025 · Engineer · Former employee · Houston, TX · Recommend · CEO approval · Business Outlook · Pros · stable, good pay and growth opportunity · Cons · way too political and red tape · Show m
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Hold — Chevron Corporation (CVX)
Current price: $185.98 | Analyst Avg PT: $187.52
$139
🔴 Bear
$189
📊 Base
$243
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$165 | Begin position |
| Tier 2 — Add | ≤$150 | Add on weakness |
| Tier 3 — Full | ≤$135 | Full allocation |
| Sell Alert | ≥$215 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Hold. At $185.98, Chevron trades roughly at its base-case DCF value and in line with analyst consensus. The 3.7% yield is attractive but the stock isn't cheap at 21.5x forward EPS. Wait for a pullback below $165 to start building — the Hess integration is the catalyst that could unlock value, but it needs time to play out.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 10 |
| Average Cost Basis | $149.19 |
| Current Market Value | $1,860 |
| Unrealized P&L | $+368 (+24.7%) |
| Annual DPS | $6.840/yr |
| Annual Dividend Income | $68/yr |
| Current Yield (at price) | 3.68% |
| Yield on Cost | 4.58% |
| vs Target (~$200K) | $1,860 / $200,000 (1%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base | FY2025 FCF of $16.6B used. This includes the Hess acquisition impact. Pre-Hess, CVX generated $15.0B in FY2024 FCF — the base reflects modest recovery as Guyana production ramps. |
| WACC | 7.65% WACC — lower than BP due to stronger balance sheet (pre-Hess) and lower beta (0.52). The Hess debt spike is temporary; management targets 15-20% debt/cap ratio by end of 2026. |
| Net Debt | Net debt of ~$22B includes the $18B Hess-related debt. CVX has $16B in cash and strong FCF generation — deleveraging should be rapid. |
| Sanity Check | Base IV of ~$189 aligns closely with the analyst consensus PT of $187.52. The DCF confirms Chevron is fairly valued at current levels. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
Report History
2026-04-25 — DCF ★ Latest Hold 2026-04-24 — DCF Hold 2026-04-22 — DCF Hold 2026-04-21 — DCF Reduce 2026-04-20 — DCF Reduce 2026-04-19 — DCF Accumulate 2026-04-18 — DCF Trim 2026-04-16 — DCF Reduce 2026-04-15 — DCF Trim 2026-04-13 — DCF Trim 2026-04-10 — DCF Reduce 2026-04-10 — DDM Trim 2026-04-09 — DCF Reduce 2026-04-09 — DDM Trim 2026-04-08 — DCF Reduce 2026-04-07 — DCF Reduce 2026-04-07 — DDM Trim 2026-03-06 — DCF Hold