To The Moon

$Chevron(CVX)$ is scheduled to report its Q1 2025 earnings before the market opens on Friday, 02 May 2025. A conference call to discuss the results is scheduled for 11:00 a.m. ET on May 2, 2025.

Revenue: Revenue is expected to be around $47.85 billion to $48.25 billion. This would be a slight decrease from the $48.72 billion reported in the same quarter last year.

Production: Total net oil-equivalent production is anticipated to be slightly lower than Q1 2024. With the oil price trending lower by 1% at time of this writing, we might expect a lower guidance from CVX.

Earnings Per Share (EPS): Wall Street analysts' consensus forecast for Q1 2025 EPS is around $2.30, according to Zacks Investment Research and Nasdaq. Some sources cite a slightly lower figure of $2.16. This represents a significant expected decrease of about 21.5% compared to the $2.93 EPS reported in Q1 2024. Analyst EPS estimates have been revised downwards over the past month.

Chevron (CVX) Last Positive Earnings Call Saw Share Price Declined By 11.99% Since

Chevron had a positive earnings call on 31 Jan 2025 which saw its share price declined by 11.99%.

Chevron showcased strong performance with record production and shareholder returns, alongside significant advancements in new energies and free cash flow growth projections. However, the quarter faced challenges with a decline in earnings, downstream margin pressures, and notable special charges.

Chevron (CVX) Guidance

During Chevron's fourth quarter 2024 earnings call, the company provided robust guidance and highlighted several key metrics. Chevron achieved a record $27 billion in cash returns to shareholders through dividends and buybacks, with a total of $75 billion returned over the last three years. The company reported fourth-quarter earnings of $3.2 billion, or $1.84 per share, with adjusted earnings of $3.6 billion, or $2.06 per share. The full-year organic CapEx was aligned with their $16 billion budget, while inorganic CapEx totaled $530 million. Chevron's adjusted return on capital employed (ROCE) was 10.5% for the year. Production growth was notable, with a 7% increase in 2024 and nearly 18% growth in the Permian region.

Looking ahead, Chevron expects to add $10 billion of annual free cash flow by 2026, driven by upstream growth, cost reductions, and the completion of key projects like the Future Growth Project (FGP) in the Tengiz field, which is projected to add 260,000 barrels of oil production capacity.

Key Factors Impacting Q1 2025 Earnings:

Oil Prices:

Demand/Supply Dynamics: Global economic growth, OPEC+ production decisions, and geopolitical tensions (e.g., Middle East conflicts, Russia-Ukraine war) will heavily influence crude prices. A recessionary environment could suppress demand, while supply constraints might boost prices.

Energy Transition: Shifts toward renewables may affect long-term oil demand sentiment, though short-term reliance on fossil fuels remains high.

Chevron sold over 20 million barrels of bio-based diesel and completed projects to lower carbon intensity, including abating over 700 thousand tons of CO2 emissions annually.

Operational Performance:

Production Levels: New projects (e.g., Tengizchevroil expansion, Gulf of Mexico assets) or acquisitions (e.g., Hess Corporation) could boost output. Unplanned outages or maintenance might reduce volumes.

Chevron delivered record production both globally and in the United States, with Permian production growing nearly 18% from last year. The company also returned a record $27 billion in cash to shareholders through dividends and buybacks.

Adjusted Downstream earnings were lower due to softer refining and chemicals margins and timing effects.

Cost Management: Efficiency gains or inflationary pressures (labor, materials) will impact margins. Chevron’s focus on lower-carbon investments (e.g., hydrogen, renewables) may affect capital allocation.

Financial Health:

Cash Flow & Dividends: Strong cash flow could support shareholder returns (dividends/buybacks). Debt levels and credit ratings will be monitored for resilience in volatile markets.

Chevron maintained a strong balance sheet with a net debt ratio of 10%. The company announced a 5% increase in the dividend, marking the 38th consecutive year of annual dividend increases.

Chevron is poised for industry-leading free cash flow growth, expecting to add $10 billion of annual free cash flow in 2026.

Chevron reported fourth quarter earnings of $3.2 billion, down from the previous quarter, with adjusted earnings $900 million lower.

Regulatory Risks:

Climate policies (e.g., methane regulations, carbon taxes) may increase operational costs. Incentives for clean energy investments could offset some risks.

The quarter included special items totaling $1.1 billion related to restructuring and impairment charges.

Market Sentiment:

ESG pressures and investor focus on emissions targets may influence stock performance, even if short-term earnings remain tied to oil/gas.

Chevron (CVX) Price Target

Based on 22 analysts from Tiger Brokers offering 12 month price targets for Chevron in the last 3 months. The average price target is $168.34 with a high forecast of $197.00 and a low forecast of $124.00. The average price target represents a 23.72% change from the last price of $136.06.

Recent market volatility and concerns about global demand may also influence the company's outlook for the rest of the year. This might affect the price target moving forward, so I expect to see a pretty wide fluctuation between different group of analysts.

Technical Analysis - Exponential Moving Average (EMA)

The energy sector overall is facing headwinds, with analysts projecting it to have the largest year-over-year earnings decline among S&P 500 sectors for Q1 2025. This is partly attributed to lower average oil prices in Q1 2025 ($71.38/barrel) compared to Q1 2024 ($76.91/barrel).

So if we looked at the different energy stocks we are seeing weakness already showing, the bears are still in control, and we are seeing RSI showing weak momentum, and this had affected the price for Chevron, so we need a strong guidance on how the company would be working to navigate the headwinds.

I am expecting more downside to Chevron share price, we could be seeing a lower lows in recent weeks, I am expect a volatile price movement post earnings.

Summary

With energy sector overall is facing headwinds, with analysts projecting it to have the largest year-over-year earnings decline among S&P 500 sectors for Q1 2025., Chevron’s strategic positioning in low-cost oil assets and energy diversification could bolster resilience.

I think we need to stay monitor for any changes to the macro trends and industry developments. I think Chevron guidance on how 2025 would be like for the energy sector especially how the strategic positioning in low-cost oil assets played out.

Appreciate if you could share your thoughts in the comment section whether you think Chevron could give a better strategic positioning in low-cost oil assets.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.