Chevron (CVX) Valuation Check After Recent Share Price Momentum

Why Chevron is on investors’ radar today

Chevron (CVX) is back in focus after recent share price moves, with the stock last closing at US$184.91. For investors, the interest now is how that price stacks up against the company’s fundamentals.

See our latest analysis for Chevron.

Recent trading has been positive, with a 10.91% 1 month share price return adding to an 18.61% year to date move and a 22.38% 1 year total shareholder return. This suggests that momentum has been building rather than fading.

If Chevron’s recent strength has you thinking about where else capital might flow in the energy transition, it could be a good moment to look at 85 nuclear energy infrastructure stocks as another potential hunting ground.

With Chevron trading around US$184.91 and sitting slightly above the average analyst price target, yet showing an implied intrinsic discount of about 51%, you have to ask: is there a genuine opening here, or is the market already baking in future growth?

Most Popular Narrative: 1% Overvalued

Chevron’s most followed narrative pegs fair value at about $183.46, just below the last close at $184.91. This frames a very tight valuation gap.

Accelerating structural cost reductions ($2-3 billion targeted by end-2026) and increased capital efficiencies from major project delivery, digitalization, and organizational streamlining are set to drive industry-leading net margins and higher free cash flow conversion.

Read the complete narrative.

Curious what is baked into that near full valuation? The narrative leans on steady revenue gains, rising margins, and a richer earnings multiple. The exact mix of those inputs is where the story gets interesting.

Result: Fair Value of $183.46 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still clear pressure points, including an overdependence on hydrocarbons and high capital intensity. These factors could weigh on revenue stability and future cash generation.

Find out about the key risks to this Chevron narrative.

Another View: DCF Paints A Very Different Picture

While the most popular narrative has Chevron trading roughly in line with its $183.46 fair value, our DCF model points to something very different. On this view, Chevron at $184.91 is about 51% below an estimated future cash flow value of $376.51. That kind of gap raises a simple question: is this a valuation anomaly, or is the cash flow optimism too generous?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Chevron for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 56 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals across the narratives, do you feel the risk or the upside stands out more for you right now? Take a moment to look through the data, weigh both sides, and move quickly to shape your own view using our breakdown of 2 key rewards and 2 important warning signs.

Looking for more investment ideas?

If you are weighing your next move after looking at Chevron, do not stop here, there are other opportunities you will want to size up before the crowd.

• Target quality at a discount by scanning our 56 high quality undervalued stocks that combine solid fundamentals with prices that may not fully reflect them.
• Prioritise resilience with 79 resilient stocks with low risk scores, built for investors who want steadier companies with fewer red flags in their profile.
• Spot potential future leaders early through our screener containing 23 high quality undiscovered gems, focusing on companies that are less talked about but still backed by robust data.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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