Bear of the Day: Chevron (CVX)

Chevron Corp. (CVX) continues to see falling earnings as crude oil prices remain depressed. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings for the third year in a row.

Chevron is one of the largest integrated energy companies in the world, with a market cap of $244.9 billion. It produces crude oil and natural gas and manufactures transportation fuels, lubricants, petrochemicals and additives.

It is also looking to grow new businesses in renewable fuels, carbon capture and offsets, hydrogen and power generation for data centers.

Chevron Beat in the First Quarter of 2025

On May 2, 2025, Chevron reported its first quarter 2025 results and beat the Zacks Consensus Estimate by $0.03. Earnings were $2.18 versus the Consensus of $2.15.

Worldwide production was relatively flat from a year ago as the impacts of asset sales were mostly offset by growth at TCO (20%), in the Permian Basin (12%), and in the Gulf of America (7%).

Capex was lower than a year ago as the inorganic investment in power solutions for U.S. data centers was more than offset by lower spend in downstream.

The company is still waiting for the conclusion of its Hess Corp. acquisition and its valuable Guyana oil reserves. It acquired 4.99% of Hess common stock, reflecting continuing confidence in the consummation of the deal.

Chevron is a Dividend Star

Chevron has been a popular stock for income investors for years. It returned $6.9 billion of cash to shareholders during the quarter in the form of both share repurchases and dividends.

It repurchased $3.9 billion shares and paid dividends of $3 billion in the quarter.

The dividend is currently yielding a juicy 4.9%.

Analysts are Bearish on Chevron for 2025

It has been a few tough years in the oil patch. Chevron’s earnings fell 30.3% in 2023 and another 23.5% in 2024.

Analysts have been cutting Chevron’s earnings estimates again over the last 30 days.

3 are lower, but 2 are higher, for 2025. That has pushed the Zacks Consensus down to $6.87 from $7.38.

For 2025, Chevron’s earnings are expected to decline the third year in a row to $6.87 from $10.05 last year. That’s another decline of 31.6%.

Here’s what it looks like on the chart.

Is Chevron Cheap?

Shares of Chevron have not broken down like the earnings have. It’s down just 4.4% year-to-date.

If you’re an investor thinking you’re going to get a steal, you aren’t. It’s not cheap on a price-to-earnings (P/E) basis. It has a P/E of 20.4. A P/E under 15 is usually considered a value stock.

Investors might want to stay on the sidelines until either the shares break down, and get cheaper, or the price of oil and natural gas rises and the earnings turn around..

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This article originally published on Zacks Investment Research (zacks.com).

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