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US Equities · Finance research note

CVX — Chevron Corporation

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Evidence and analysis

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 7.31%
Profit Margins 5.93%
Return on Equity 6.64%
Return on Assets 3.46%
Free Float 1.88B
Dividend Yield 4.16%
Short Int % Utilisation 1.16%

2.2 Growth

Metric Value
Revenue Growth 2.3%
Free Cash Flow 11.78B
EBITDA 11.11 (Ratio)
Enterprise Value 421.07B
EV/Revenue 2.27
EV/EBITDA 11.11

Revenue growth of 2.3% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 37.14%
Risk / Std Dev (Ann.)* 23.54%
1-Year Price Return* 33.11%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $200.00
52-Week Range $146.49 – $214.71
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $184.43B $193.41B
Net income Reported net income $12.30B $17.66B
Total assets Year-end reported balance $324.01B $256.94B
Shareholders’ equity Year-end reported balance $186.45B $152.32B
Net margin Net income ÷ revenue 6.67% 9.13%
Asset turnover Revenue ÷ total assets 0.5692x 0.7528x
Equity multiplier Total assets ÷ shareholders’ equity 1.7378x 1.6869x
ROE Net margin × asset turnover × equity multiplier 6.60% 11.59%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $184.43B
Prior annual revenue $193.41B
EBIT $20.96B
Tax rate 36.80%
NOPAT = EBIT × (1 − tax rate) $13.25B
Forecast start-growth basis -4.64%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $13.25B
Add: depreciation & amortisation $20.13B
Less: capital expenditure -$17.35B
Less/(add): working-capital cash-flow movement -$1.65B
Current unlevered FCFF $14.38B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 -4.64% $12.63B $19.20B -$16.54B -$1.57B $13.72B $13.26B
2 -2.86% $12.27B $18.65B -$16.71B -$1.53B $12.68B $11.47B
3 -1.07% $12.14B $18.45B -$17.17B -$1.51B $11.90B $10.07B
4 0.71% $12.23B $18.58B -$17.94B -$1.52B $11.35B $8.97B
5 2.50% $12.53B $19.04B -$19.04B -$1.56B $10.97B $8.12B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.49
Cost of equity 7.40%
Pre-tax cost of debt 3.73%
WACC 6.93%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $253.74B
Implied terminal EV / EBITDA 6.53x
Terminal value as % of enterprise value 77.77%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $51.89B
Present value of terminal value $181.48B
Indicated enterprise value $233.37B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $233.37B
Less: gross interest-bearing debt $40.76B
Add: cash and equivalents $6.30B
Add: affiliate investments $0.00
Less: minority interests $5.73B
Indicated common equity value $193.19B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 1,855,637,000.00
Share-count basis reported diluted weighted-average shares
Current market price $205.11
DCF indicative value per share $104.11
Indicative value vs. market price -49.24%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:29:14.573952 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 3.26% 4.76%
Adjusted R² 0.10 0.09
Annualised residual volatility 21.67% 21.64%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.15 (-1.20) -0.12 (-0.80)
Size (SMB) -0.11 (-0.63) -0.15 (-0.78)
Value (HML) 0.59 (3.95) 0.50 (2.75)
Profitability (RMW) NM 0.01 (0.08)
Investment (CMA) NM 0.20 (0.74)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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