Key Takeaways
- Chevron’s downstream business swung from an $817 million loss in Q1 to $4.93 billion in Q3, lifting adjusted EPS to $5.28 against a $4.78 consensus.
- Net debt nearly halved in six months, from $40.11 billion to $20.73 billion, while buybacks fell to $2.5 billion from about $3.1 billion, the bottom of Chevron’s range.
- Wall Street expects normalized EPS to fall from $18.24 in 2026 to $13.19 in 2028, which leaves the stock at about 17.9 times 2028 estimates.
Chevron (CVX) stock closed at $235.52 on Friday, October 30, up 1.75% after touching a 52-week high of $236.48, following a third-quarter report in which refining drove most of the year-over-year earnings gain. Adjusted EPS came in at $5.28, well ahead of the $4.78 consensus, and downstream earnings rose to $4.93 billion from $1.14 billion a year earlier.
What Chevron did with the money matters more than the beat. Buybacks fell to $2.5 billion from about $3.1 billion in the second quarter, the bottom of the company’s quarterly range, and most of the cash went to the balance sheet. Exxon Mobil (XOM), which reported the same day on the same refining surge, bought back $5.1 billion, twice Chevron’s pace.
Refining Did the Work for Chevron
Reuters tied the surge to the U.S.-Israeli war with Iran, which disrupted Middle East fuel supply and pushed refining margins higher. Chevron ran its U.S. refineries at a record 1.09 million barrels a day to capture it.
The swing is sharp. Chevron’s downstream business lost $817 million in the first quarter, then earned $4.87 billion in the second and $4.93 billion in the third. That’s nearly $9.8 billion from two quarters of unusually wide margins.
CVX Downstream Revenue: Quarterly 2022-2026 (TIKR)
Downstream revenue tells the same story, more than doubling from $18.23 billion in the third quarter of 2025 to $49.65 billion in the second quarter of 2026.
Where Chevron’s Windfall Went
Net debt nearly halved in six months, falling from $40.11 billion at the end of March to $20.73 billion at the end of September.
CVX Net Debt: 2025-2026 (TIKR)
Most of that $19.4 billion drop is real paydown. Total debt fell by about $11.9 billion, to $33.5 billion, and cash rose by about $7.5 billion, to $12.8 billion. In the third quarter alone, Chevron produced $12.0 billion of free cash flow and returned about $6 billion through dividends and buybacks.
Management doesn’t plan to spend it any faster. On the Q3 earnings call, CFO Eimear Bonner pointed to Brent’s swing from $68 to $132 a barrel during the quarter and said Chevron is “not changing anything in the short term given that volatility.” Buybacks will stay within the $2.5 billion to $3 billion quarterly range.
TIKR Tracks 26 Analysts on Chevron. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Chevron, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Chevron’s Analyst Ratings
The Street Doesn’t Expect These Margins to Last
Analyst estimates back Chevron’s caution.
CVX Normalized EPS Estimates: 2026-2028 (TIKR)
Wall Street expects normalized EPS of $18.24 this year, then $15.90 in 2027 and $13.19 in 2028. That’s a 28% decline over two years, which assumes the war premium in both oil prices and refining margins fades.
Exxon is sticking to its own playbook. It has also cut net debt, by nearly $11 billion this year, but it kept its 2027 buyback plan at $20 billion, the same pace as the past two years.
The Bottom Line on Chevron Stock
Chevron is making the right call. Buying back more stock at a 52-week high with money from a war-driven margin spike would mean paying a peak price with peak cash. Paying down debt now leaves room to buy back more once margins fade.
The risk for shareholders sits in the valuation. At $235.52, Chevron trades at about 14.8 times 2027 estimates and 17.9 times 2028. If the Street is right that earnings fall 28% by 2028, the stock already prices in a lot of good news.
So What Is Chevron Stock Actually Worth?
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Disclaimer:
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