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Chevron: Stronger Earnings, Smaller Margin of Safety

Writer: Felix Ouma
Felix Ouma
Sep 24
8 min read

RATING: HOLD (downgraded from Buy)  |  TARGET: $201  |  PRICE: $209.51 as of September 18, 2026  |  IMPLIED DOWNSIDE: 4.1%


Summary

  • Chevron's Q2 adjusted earnings were $12.0 Bn, or $6.06 per share, while sales and operating revenue reached $67.2 Bn. Adjusted EPS beat the $5.55 consensus by 9.2%.


  • The operating thesis strengthened. Production reached 4.07 Mn boe/d, the company achieved its $3 Bn cost-saving run rate early, and Hess synergies were raised to $1.5 Bn.


  • The quarter was not a normal earnings base. Brent averaged $104 per barrel and favorable timing effects added about $1.4 Bn, so I normalize 2027 adjusted EPS to $14.48.

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Chevron gas station with Food Mart and car wash, two cars at pumps, blue sky, and gas price signs visible.
Source: Simple Wikipedia

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