Chevron
CVX · NYSEEnergy · Integrated Oil & Gas
Since the Report + 10.7%
Close on Report DayJul 31
$189.09▲ 2.4%Report-Day Move
- Market Cap(Today)
- ≈ $417 B
- 1Y Return(At Report)
- + 24%
- P/E($10.84 · Trailing 12M)
- 19.3
- Net Margin(Trailing 12M)
- 9.9%
War-driven crude prices lifted Chevron's adjusted profit almost fourfold; the stock rose 2.4% on results day, then handed every bit of it back once Iran tensions eased and oil retreated.
Revenue (Q2)
$70.06B
▲ 56% Year Over Year
Adjusted EPS
$6.06
$1.77 a Year Ago
Free Cash Flow
$18.1B
3.7x Last Year
Production
4.07M boe/d
▲ 20% · U.S. Record
Average Brent
$104/bbl
$68 a Year Ago
Net Debt Ratio
13.1%
15.6% at End-2025
Quarterly Revenue ($ Billion)
44.82
49.73
46.87
48.61
70.06
- Q2 25
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Annual Revenue Growth
- ▲ 56%$70.06B · Brent at $104/bbl
- Upstream Segment Earnings
- $8.2B$2.7B a Year Ago · Output ▲ 20%
- U.S. Natural Gas Price
- $0.91▼ $1.75 a Year Ago (per Mcf)
Q3 2026 Company Guidance
- Full-Year Capital Expenditure18 – 19 billion
25% less capital per barrelLow End of Range ▲
- Annual Production Growth (through 2030)2% – 3%
Long-term target set in November 2025Target Reaffirmed ✓
- Adjusted Free Cash Flow Growth10%
Annual average through 2030Above 10% ▲
- Structural Cost Reduction Program3 – 4 billion
First $3B tranche completedSix Months Early ▲
- Hess Annual Synergy Target1.5 billion
$1.5B delivered50% Above Initial Target ▲
The blue band is the company's low–high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. Axis is ±23% around the midpoint.
- Free Cash Flow (Q2)
- $18.1B3.7x Last Year
- Shareholder Returns (Q2)
- $6.6B$3.5B Dividends · $3.1B Buybacks
- Capital Expenditure (Q2)
- $4.5BLow End of the Annual Range
“Our strong second quarter performance is a result of disciplined investment and strong execution that drove record U.S. upstream production, record crude throughput in our U.S. refineries, and exceptional reliability across key assets.”
- Capital discipline and cash generation
- Early synergies from Hess integration
- Iraq and exploration growth options
Summary
Chevron posted $70.06B in revenue and $6.06 in adjusted earnings per share for the second quarter of 2026. Revenue rose 56% from a year earlier, and adjusted EPS climbed from $1.77 to $6.06 — a 3.4x increase that cleared the Market Expectation of $5.62 by roughly 8%. Net income reached $12.1B versus $2.5B in the same quarter last year. The single biggest driver behind those numbers is the oil price: Brent averaged $104 a barrel during the quarter, 53% above the $68 average of a year ago. But price is not the whole story. Production reached 4.07 million barrels of oil equivalent per day, up 20% year over year; U.S. output hit a company record at 2.08 million barrels per day, and U.S. refineries set a record of their own by running more than 1 million barrels of crude a day. Cash flow from operations came in at $22.6B (2.6x last year) and free cash flow at $18.1B (3.7x).
The stock closed results day at $196.83, up 2.35%. For a quarter in which profit nearly quadrupled, that is a restrained reaction, and the reason is straightforward: the market knew this level of earnings was not durable. The quarter was powered by a Middle East conflict pushing crude higher, and the picture changed within three trading days. On August 3, after the U.S. pulled back from a planned strike on Iran and signaled a preference for talks, Brent dropped about 5% in a single session to $83.50, a three-week low. Chevron fell three days running, bottoming at $186.41 on August 5, and closed at $189.09 on August 6 after a 1.4% rebound — below where it traded before the report. It is a familiar pattern for energy names: what the quarter printed matters less than where the commodity goes after the quarter ends.
On the quarter itself, our read is positive. Set the price tailwind aside and everything within Chevron's own control moved the right way: the Hess acquisition delivered 50% more synergies than targeted, with $1.5B captured six months ahead of schedule; the $3B structural cost reduction target was also hit six months early; the net debt ratio fell from 15.6% at year-end to 13.1% after $8.4B of debt was retired in the quarter. Return on capital employed was 21.4%. Shareholder returns totaled $6.6B ($3.5B in dividends, $3.1B in buybacks), and the company narrowed 2026 organic capital spending to the low end of its $18-19B range. Our score is 82 with a buy verdict — but that grades the quality of the quarter, not the stock. Repeating this level of profit next quarter depends on crude staying above $100, and right now the tape says otherwise.
Full Review
ClaudeCrude prices drove the quarter, but volumes set records too.
Chevron's realized U.S. crude price rose from $47.77 to $70.80 a barrel, and its international realization from $58.88 to $96.41. That means selling the same barrel for roughly 50% more, and at an integrated oil company most of that gap drops straight to the bottom line. Upstream segment earnings jumped from $2.7B to $8.2B. Acknowledging the role of price is not the same as dismissing the quarter, because volumes genuinely stepped up as well. Production of 4.07 million barrels of oil equivalent per day is a 20% annual increase, largely from consolidating the Hess assets for a full quarter. U.S. output of 2.08 million barrels per day is the highest in company history. Management expects 25% better capital efficiency in the Permian than in 2025 — in other words, sustaining the same output on less spending. When prices normalize, this volume-and-cost side is exactly the part that stays.
The Hess integration is running ahead of schedule.
The acquisition passed its first anniversary this month, and the numbers suggest the integration has gone smoothly. On the call, CEO Mike Wirth said the company captured 50% more synergies than initially targeted, with $1.5B realized six months ahead of plan. More importantly, he noted that free cash flow generated by the Hess assets has been roughly double the incremental dividends the deal added — meaning the transaction is accretive on a per-share basis. In large mergers the real risk tends to surface after year one, in integration costs, and Chevron appears to have cleared that hurdle for now. The company reaffirmed its 2030 objectives: 2-3% annual production growth, adjusted free cash flow growth averaging more than 10% a year, and better than 3% improvement in return on capital employed.
Cash flow eased both debt and shareholder pressure.
The $22.6B of operating cash flow left $18.1B in free cash flow after $4.5B of capital spending — nearly three times the $6.6B returned to shareholders during the quarter ($3.5B in dividends, $3.1B in buybacks). Chevron used the difference to pay down debt, retiring $8.4B in the quarter and cutting the net debt ratio from 15.6% at the end of 2025 to 13.1%. Debt to operating cash flow stands at 0.8x, or 0.6x on a net basis. The practical meaning: even if crude slides from $100 to $80, the company has built a balance sheet that can absorb it without touching the dividend. The $1.78 per share quarterly dividend payable in September annualizes to $7.12, a yield of roughly 3.8% at the current price. Why free cash flow, not reported profit, is the real backstop for a dividend is covered in our cash flow guide: /rehber/nakit-akisi
Refining and natural gas told two different stories.
Downstream was the quiet hero of the quarter: segment earnings rose from $0.7B to $4.9B, with U.S. refineries setting a record by processing 1.07 million barrels of crude per day. High crude prices normally squeeze refining margins, but product prices rose alongside them this quarter and the plants ran hard, so the result went the other way. Natural gas was the weak spot: the U.S. realized price halved from $1.75 to $0.91 per thousand cubic feet. International gas improved from $7.20 to $7.84, but the U.S. decline partly offsets what oil delivered. Middle East conflict also curtailed output in the Saudi-Kuwait Partitioned Zone; management put that at roughly 1% of total quarterly production, and noted that events in the Black Sea intermittently affected the CPC pipeline.
The share reaction prices oil, not the results.
The stock closed July 31 up 2.35% at $196.83. For a quarter in which profit nearly quadrupled, that is a modest move, and the market's message was clear: this earnings level came with a war premium and is not durable. Sure enough, on August 3 the U.S. stepped back from military action against Iran and signaled talks, Brent fell 5% to $83.50, and Chevron declined three sessions in a row. As of August 6 the stock sits at $189.09, below its pre-results level. The average target among 25 analysts is $216.96, implying roughly 15% upside from here, with a consensus rating on the buy side. Most of those targets, however, were refreshed in the oil-price environment that prevailed on results day; if Brent settles in the $80s, downward revisions are a real possibility. It is a useful reminder that in energy names the source of volatility is usually the commodity, not the company: /rehber/volatilite
Strengths
6- Adjusted EPS rose from $1.77 to $6.06, beating the Market Expectation by roughly 8%.
- Production of 4.07 million barrels of oil equivalent per day was up 20% year over year, with company records in both U.S. output and U.S. refinery crude throughput.
- Free cash flow of $18.1B was nearly three times the $6.6B returned to shareholders.
- Hess synergies came in 50% above target and six months early; the $3B structural cost reduction was also completed ahead of schedule.
- $8.4B of debt retired in the quarter cut the net debt ratio from 15.6% to 13.1%; return on capital employed was 21.4%.
- 2026 organic capital spending was narrowed to the low end of the $18-19B range, with 25% better Permian capital efficiency expected.
Risks
5- Most of the profit came from a $104 average Brent price; crude fell to $83.50 on August 3, and this earnings level cannot be repeated at current prices.
- U.S. realized natural gas prices halved, from $1.75 to $0.91 per thousand cubic feet.
- Middle East conflict curtailed production in the Saudi-Kuwait Partitioned Zone, about 1% of quarterly output, and Black Sea events intermittently disrupt the CPC pipeline.
- Buyback and dividend capacity is tied directly to the oil price; a sustained low-price environment would narrow shareholder returns.
- Most analyst targets were set in a high-oil environment and face downward revision risk if peace talks progress.
What to Watch
4- September 10, 2026: the $1.78 per share quarterly dividend is paid. That annualizes to $7.12, a yield of roughly 3.8% at the current price.
- August-September 2026: the U.S.-Iran negotiating track will set oil's direction. Brent settling in the $80s would pull Q3 earnings well below Q2.
- Late October 2026: third quarter results. The thing to watch is whether the production records hold as realized prices come down.
- End of 2026: whether organic capital spending finishes at the low end of the $18-19B range, and whether Hess synergies hit their second-year target.
Upcoming Earnings
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