Chevron Corporation (CVX) Stock Valuation — DCF Analysis
Oil & Gas Integrated · NYSE
Current Price
$187.22
Intrinsic Value
$272.89
+31.4% margin of safety
COMPETITIVE MOAT
↑Integrated Operations
Chevron's upstream, midstream, and downstream integration provides cost efficiencies and resilience. This allows them to capture value across the entire oil and gas chain.
↑Scale and Capital Allocation
Massive scale and disciplined capital allocation enable significant investment in large-scale projects. This creates a high barrier to entry for smaller competitors.
↑Geographic Diversification
Operations spread across various regions mitigate country-specific risks. This diversification supports stable production and revenue streams.
INVESTMENT RISKS
↓Commodity Price Volatility
Oil and gas prices are inherently volatile, directly impacting Chevron's profitability. Geopolitical events can cause sharp price swings.
↓Regulatory and Environmental Pressures
Increasing global focus on climate change and stricter environmental regulations pose significant operational and financial risks. Transitioning to cleaner energy requires substantial investment.
↓Geopolitical Instability
While diversified, significant geopolitical events, particularly in major oil-producing regions, can disrupt supply chains and impact global energy prices.
Base case
CVX base case valuation
A base case discounted cash flow model for CVX estimates an intrinsic value of about $272.89 per share, against a current price of $187.22. The model assumes 15.0% annual free cash flow growth, a 10.0% discount rate, and a 28x exit multiple.
Intrinsic Value
$272.89
Margin of safety
+31.4%
Expected annual return
+7.8%
Base case assumptions: 15.0% annual growth, 10.0% discount rate, 28x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CVX valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Chevron Corporation respond.
Open DCF Calculator for CVXCompany Overview
Chevron Corporation functions as a global energy and chemicals powerhouse, orchestrating its diverse operations worldwide. The company's business is organized into two primary divisions: Upstream and Downstream. The Upstream segment focuses on the full lifecycle of crude oil and natural gas, from their initial exploration and development to production and subsequent transportation. This also encompasses the processing, liquefaction, transit, and regasification of liquefied natural gas (LNG), as well as pipeline transport of crude oil and the movement, storage, and sale of natural gas. Additionally, this segment manages a facility dedicated to converting natural gas into liquid fuels. In contrast, the Downstream segment is tasked with refining crude oil into a variety of petroleum products. Its activities include the merchandising of crude oil, refined goods, and lubricants, in addition to the creation and distribution of renewable fuels. This division is also responsible for moving crude oil and refined products using a range of methods, including pipelines, ships, motor vehicles, and rail cars. Furthermore, it produces and markets bulk petrochemicals, industrial-grade plastics, and additives for both fuels and lubricants. Beyond these core ventures, Chevron is also involved in financial management, debt financing, insurance underwriting, real estate development, and various technology-driven enterprises. Founded in 1879, the company operated as ChevronTexaco Corporation until it officially became Chevron Corporation in 2005. Its corporate headquarters are situated in San Ramon, California.
Financial Metrics — CVX Stock Valuation Data
Revenue/Share (TTM)
$93.88
FCF/Share (TTM)
$6.75
ROIC (TTM)
3.3%
ROE (TTM)
6.2%
P/FCF
27.9x
EV/EBITDA
10.0x
FCF Yield
3.59%
Debt/Equity
0.25x
Based on trailing twelve-month data, CVX shows a free cash flow per share of $6.75 and a ROIC of 3.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 27.9x and FCF yield of 3.59% are important context metrics when evaluating CVX's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of CVX?
Chevron Corporation currently generates $6.75 in free cash flow per share. At the current price of $187.22, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is CVX undervalued?
CVX trades at a P/FCF ratio of 27.9x with a free cash flow yield of 3.59%. This P/FCF is in a moderate range. However, whether CVX is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value CVX stock using DCF?
To perform a DCF valuation on Chevron Corporation: (1) Start with the trailing free cash flow per share ($6.75) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Integrated industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CVX's risk profile — with a debt-to-equity of 0.25x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to CVX?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Chevron Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Integrated trends, then discounting those amounts to today's dollars. CVX's ROIC of 3.3% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect CVX stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CVX, with a debt-to-equity ratio of 0.25x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 10.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See CVX PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value CVX with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.