Chevron (CVX) Stock Rises as Earnings Top Estimates Despite Five-Year Profit Low

TLDR

• Chevron reported Q1 adjusted earnings of $1.41 per share, beating analyst estimates of $0.97.
• Net profit fell to $2.21 billion from $3.5 billion a year ago, mainly due to $2.9 billion in unfavorable timing effects tied to financial derivatives.
• Total production rose 15% year-over-year to 3.86 million barrels of oil equivalent per day.
• The company returned $6 billion to shareholders in Q1, including $2.5 billion in buybacks and $3.5 billion in dividends.
• Analysts upgraded CVX to Buy with a $225 price target, citing strong near-term free cash flow.

Chevron (CVX) stock was up around 1.9% in pre-market trading Friday after the oil major beat Q1 earnings expectations, even as its overall net profit fell to its lowest level in five years.

Chevron Corporation, CVX

Adjusted earnings came in at $1.41 per share, well above the analyst consensus of $0.97. Revenue rose 2.1% year-over-year to $48.6 billion, though it fell short of the $51.9 billion Wall Street had penciled in.

The headline miss on profit was largely a paper problem. Net income dropped to $2.21 billion, or $1.11 per share, from $3.5 billion a year ago. That decline was driven almost entirely by $2.9 billion in unfavorable timing effects related to financial derivatives used to hedge against swings in commodity prices.

CFO Eimear Bonner told Reuters the underlying business was solid, and said roughly $1 billion of those paper losses are expected to reverse and show up as profit in Q2.

The Iran War has pushed oil prices sharply higher this year, which boosted Chevron’s upstream results. Upstream earnings in the U.S. rose to $2.11 billion from $1.86 billion in the same period last year. International upstream earnings slipped slightly to $1.8 billion from $1.9 billion, hurt by the same timing effects and currency headwinds.

Total production increased 15% year-over-year to 3.86 million barrels of oil equivalent per day. The jump was largely driven by the Hess acquisition and output growth in the U.S. Gulf and the Permian Basin. U.S. production topped 2 million barrels per day for the third consecutive quarter.

Downstream Takes a Hit

The downstream picture was more mixed. U.S. downstream earnings improved to $196 million from $103 million a year ago on better refined product margins. But international downstream swung to a $1.01 billion loss from a $222 million profit in Q1 2025, hit by lower margins, timing effects, and higher transportation costs.

Chevron also had to deal with disruptions tied to the Israel conflict. The company had temporarily suspended natural gas operations off Israel’s coast, though it largely avoided the physical damage that some competitors absorbed during the Iran War period.

The company returned $6 billion to shareholders during the quarter, made up of $3.5 billion in dividends and $2.5 billion in stock buybacks. RBC Capital analyst Biraj Borkhataria noted results were strong overall, but flagged that some investors may have been hoping for an increase in buybacks. He added that stronger cash generation later in the year could lift repurchases in Q2.

Analyst Upgrades, Higher Price Target

CVX stock hit an all-time high of $214 earlier this year before pulling back to around $193 as markets began pricing in the possibility of a ceasefire and lower oil prices.

Tudor, Pickering Holt analyst Jeoffrey Lambujon upgraded CVX from Hold to Buy, setting a $225 price target. In his note, Lambujon said most of the factors that drive Chevron’s near-term and multi-year cash flow outlook are already locked in, with potential for upside over the longer term.

Chevron’s capital spending has been declining as it wrapped up growth projects in Kazakhstan and the Permian Basin. Production from those projects is now flowing, which analysts expect to underpin free cash flow through the coming years.

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