Chevron Corporation (CVX) Intrinsic Value & DCF Valuation
Oil & Gas Integrated · NYSE
Current Price
$205.24
Intrinsic Value
$208.41
+1.5% margin of safety
What Is Chevron Corporation's Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Chevron Corporation (CVX) at $208.41 per share, compared with a market price of $205.24, a margin of safety of +1.5%. The base case assumes 1.1% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $182.35 to $239.24. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Chevron Corporation (CVX) Undervalued?
At $205.24, CVX trades about 1.5% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Massive Scale and Infrastructure
Chevron's vast global operations and integrated infrastructure provide significant cost advantages and operational efficiencies. This scale makes it difficult for smaller competitors to replicate their reach and capabilities.
↑Deep Reservoir Expertise
Decades of experience in exploration and production, particularly in complex offshore environments, have built proprietary knowledge. This expertise allows Chevron to identify and extract resources more effectively than many rivals.
↑Access to Premium Basins
Chevron holds interests in some of the world's most prolific and cost-effective oil and gas basins. This strategic positioning ensures a consistent and high-quality supply of reserves.
INVESTMENT RISKS
↓Commodity Price Volatility
Chevron's profitability is highly sensitive to fluctuations in global oil and gas prices. Significant price drops can severely impact revenue and earnings.
↓Environmental, Social, and Governance (ESG) Scrutiny
Intensified scrutiny on ESG performance can lead to reputational damage, increased compliance costs, and potential investor divestment. Negative environmental incidents can have severe financial and operational consequences.
↓Capital Intensity and Project Execution
Large-scale oil and gas projects require massive capital investment and are subject to significant execution risks. Delays or cost overruns can erode project economics and shareholder returns.
Base case
CVX base case valuation
Intrinsic Value
$208.41
Margin of safety
+1.5%
Expected annual return
+0.3%
Base case assumptions: 1.1% annual growth, 10.0% discount rate, 15.13x exit multiple, 5 year projection. Data as of 2026-08-21.
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)
$105.95
FCF/Share (TTM)
$13.71
ROIC (TTM)
7.7%
ROE (TTM)
11.0%
P/FCF
15.1x
EV/EBITDA
7.8x
FCF Yield
6.61%
Debt/Equity
0.20x
On a trailing twelve-month basis, CVX generates free cash flow per share of $13.71 alongside a ROIC of 7.7%, both central inputs for a DCF valuation. Its P/FCF ratio of 15.1x and FCF yield of 6.61% then frame how CVX is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of CVX?
Chevron Corporation currently generates $13.71 in free cash flow per share. At the current price of $205.24, 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 15.1x with a free cash flow yield of 6.61%. 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 ($13.71) 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 0.20x, 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 7.7% means the company's return on invested capital sits below the level that typically clears 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 0.20x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 7.8x, 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 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.