Chevron's Q1 Outlook Shows Challenges Ahead for Investors

Chevron's upcoming earnings report raises concerns as analysts project a 15% dip in EPS. Recent performance indicates a lack of growth, with stock lagging the S&P 500. Investors eye long-term recovery, but immediate challenges persist.

Date: 14-04-2025

AI Rating: 6

Performance Outlook
Chevron Corporation is set to announce its Q1 results, with analysts projecting a non-GAAP EPS of $2.49—a significant 15% decrease from last year's $2.93. Having missed earnings estimates twice in the past four quarters, this trend raises investor concerns about short-term profitability amidst fluctuating oil prices and refining margins.

In terms of long-term projections, there is a slight optimism with an expected EPS of $10.30 for FY 2025, a 2.5% increase from $10.05 in FY 2024. Moreover, estimates for FY 2026 suggest an acceleration of earnings growth to $12.23 per share, which could attract investors seeking value in a recovering sector.

Production Metrics and Profitability
Chevron has demonstrated robust production capabilities, reporting record levels in 2024 with a 19% increase in U.S. net oil-equivalent production. However, lower profitability was evident, demonstrated by a 43.7% decrease in non-GAAP adjusted earnings year-over-year to $3.6 billion. This sharp decline, along with a dip in sales revenues, is disconcerting.

Despite the recent performance downturn—Chevron's stock dropping 16.2% over the past year—the consensus rating remains a "Strong Buy" due to analysts maintaining a mean price target of $176.64, indicating a potential upside of 30.2%. The divided opinions among analysts suggest a cautious approach from investors with positions held on both sides. Analyst sentiment in the face of challenging market conditions will be crucial for investor confidence looking ahead.

Stocks: CVX