Chevron Stock (CVX) Makes Highs Ahead of Earnings As Oil Prices Rise

Chevron’s stock (NYSE:CVX) hit new highs at $174.92 ahead of earnings, with WTI Crude up 3.4% on the day. The company reports before the market open, with attention firmly on the print.

The quarter provides the read on whether the company can sustain cash returns and margin discipline while absorbing a 14% decline in average WTI crude prices year over year, from approximately $70 per barrel in Q4 2024 to $60 in Q4 2025.

Consensus sits at $1.71 EPS and $47.4B revenue, representing a 32% earnings decline and a 6.4% revenue decline versus the prior year, positioning the bar at levels that reflect commodity headwinds but leave limited room for execution shortfalls.

The setup is shaped by two offsetting forces. Chevron delivered record production volumes exceeding 4 million barrels of oil-equivalent per day in the third quarter, supported by Permian Basin growth, Gulf of America contributions, and the completed Hess acquisition.

That operational momentum should carry into Q4. At the same time, the company is absorbing $17 billion to $17.5 billion in capital expenditures for 2025, including Hess integration costs and ongoing TengizChevroil expansion, creating near-term cash flow pressure that constrains buyback capacity. Management guided Q2 2025 repurchases of $2.0 billion to $3.5 billion, implying an annualized pace of $11.5 billion to $13.0 billion at the low end of the longstanding $10 billion to $20 billion framework.

The result will determine whether Chevron can defend its 23.9x trailing P/E multiple, a premium to the integrated peer group, while operating within the $18 billion to $19 billion 2026 capital budget management has committed to. A beat driven by downstream margin recovery and volume resilience would support the valuation.

A miss, particularly one accompanied by softer capital-return guidance or upward pressure on the 2026 spending plan, would challenge the premium and force a reassessment of the company’s ability to generate free cash flow at $70 Brent planning levels.

Read on for a more detailed overview of previous performance, as we delve into the expectations for the print.

Consensus Estimates

The consensus EPS estimate of $1.71 reflects a 32% year-over-year decline driven by lower crude prices and higher depreciation costs tied to capital-intensive assets. The estimate range of $1.58 to $2.11 is wide, reflecting uncertainty around downstream margin contribution and the degree to which volume growth can offset commodity headwinds. Estimate momentum has been negative, with the 30-day revision trend showing a $0.36 decline to the current level, consistent with analysts lowering expectations as oil prices weakened through the fourth quarter.

Revenue consensus of $47.42 billion sits 6.4% below the prior year, a more modest decline than earnings given the company’s ability to sustain production volumes. The estimate range of $43.08 billion to $50.31 billion, a $7.2 billion spread, underscores the sensitivity to commodity price assumptions and downstream throughput. With no upward revisions in the past 30 days and a Zacks Earnings ESP of -2.39%, the Street is positioned for a result that meets or slightly misses the lowered bar rather than a material beat.

Management Guidance and Commentary

Chevron does not provide quarterly EPS guidance, but management has established clear parameters for capital allocation and investment that effectively frame expectations.

In May 2025, the company guided second-quarter share repurchases of $2.0 billion to $3.5 billion and noted that annualizing that pace would imply $11.5 billion to $13.0 billion of repurchases for the full year, at the low end of the $10 billion to $20 billion annual framework. That signal compressed forward EPS models by implying a higher share count than previously assumed.

“Management explicitly stating that further benefits are expected in the fourth quarter” regarding the $1.5 billion annual run-rate savings from the new operating model.

The cost reduction program has been a consistent theme across 2025 earnings calls. Chevron captured approximately $1.5 billion in annual run-rate savings from its restructured operating model, with management indicating that additional benefits would flow through in the fourth quarter. That commitment provides a partial offset to commodity headwinds and supports the thesis that the company can defend margins through operational discipline even as crude prices weaken.

On capital expenditures, management set the 2026 budget at $18 billion to $19 billion, with a midpoint of $18.5 billion, and reiterated a longer-term framework of $18 billion to $21 billion per year through 2030. The guidance is intended to signal discipline and free cash flow sustainability at $70 Brent planning levels. Any upward pressure on that range, whether from integration costs or project overruns, would undermine confidence in the company’s ability to maintain shareholder returns while funding growth.

Chevron’s corporate headquarters showcases the company’s commitment to operational excellence and shareholder value creation.

Sector & Peer Comparison

Chevron trades at a 23.9x trailing P/E, a 73% premium to Exxon Mobil’s 13.8x and a 93% premium to ConocoPhillips’ 12.4x. The valuation gap is not justified by profitability metrics. Chevron’s 6.8% profit margin trails Exxon’s 8.9% and ConocoPhillips’ 15.3%, while its 7.3% return on equity lags both peers and the broader integrated group. The premium appears to reflect investor confidence in Chevron’s capital discipline and shareholder return framework rather than current earnings power.

Earnings Track Record

Chevron has beaten earnings estimates in 12 of the past 18 quarters, a 66.7% beat rate with an average surprise of 2.9%. The pattern shows operational execution that modestly exceeds lowered expectations rather than consistent outperformance against stable estimates. The most recent quarter, Q3 2025, delivered a 19.0% beat as record production volumes and Hess integration benefits offset weaker commodity prices.

Post-Earnings Price Movement History

Chevron’s corporate campus reflects the company’s focus on sustainable operations and environmental stewardship.

Expected Move & Implied Volatility

The options market is pricing an expected move of 3.2% for Chevron’s Q4 2025 earnings, approximately double the 1.6% historical average post-earnings move. The implied range of $167.14 to $178.20 reflects elevated uncertainty around commodity price sensitivity and management’s ability to sustain capital returns while absorbing integration costs.

Expert Predictions & What to Watch

Key Outlook: Guidance Will Drive the Trade

Key Metrics to Watch

The Q4 report will be judged primarily on two factors: whether downstream margins recovered as analysts expect and whether management reaffirms disciplined capital allocation. Downstream earnings consensus of $760 million represents a sharp recovery from the $248 million loss in the prior year period. A result above $900 million would validate the thesis that refining economics have structurally improved and provide a cushion against upstream volatility.

On capital allocation, the key signal is buyback pacing for Q1 2026. Management guided Q2 2025 repurchases of $2.0 billion to $3.5 billion, with a midpoint of $2.75 billion. A signal that Q1 2026 buybacks will be at or above that midpoint would support confidence in free cash flow generation. A reduction below $2.5 billion would compress forward EPS models and challenge the premium valuation.