Is Chevron Stock A Real Bargain? Trefis Team Tue, November 10, 2026 at 1:05 PM EST 4 min read CVX -0.16% ^GSPC -0.85% XOM -0.49% COP +0.65% MPC -0.48% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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Chevron (CVX) stock trades at 15.3 times earnings, against 22.3 for the median S&P 500 company. The shares are that cheap even after returning 43.2% over the past year, compared with 13.7% for the S&P 500. A buyer could be getting a sound business on sale, or paying a fair price for profits that may not stay this high. So why is Chevron stock still this cheap after such a run?
Profit Has Risen Faster Than Chevron's Shares
Chevron's net income for the latest four quarters more than doubled from a year earlier, far faster than its share price, and that keeps the multiple low. The company earned $9.92 billion in fiscal Q3 2026, the latest quarter, nearly three times what it earned a year earlier. Revenue rose 35.4% from the same quarter of 2025. Chevron kept 17.5% of that revenue as operating profit, up from 8.9% a year before.
The profit came with cash. Free cash flow over the twelve months to September 2026 equaled 8.3% of Chevron's market value. Chevron generates that cash by pumping oil and gas in its Upstream business and refining crude in its Downstream business.
Most Of Chevron's Profit Came In Two Quarters
Chevron earned most of its twelve-month profit in just two quarters, and that is the case for the discount. Of $32.9 billion in operating income over the twelve months to September 2026, $25.7 billion came in fiscal Q2 and Q3 2026. The latest year also stands out: Chevron's operating margin for those twelve months was 14.6%, against 11.3% and 8.1% in the twelve months to September 2024 and 2025.
On the October 30 call, management said oil traded as low as $68 and as high as $132 a barrel in the third quarter alone. It expects refining margins to stay elevated in the short term.
Chevron's net income over the twelve months to September 2026 was $27.0 billion, and it has earned more before and seen it fall. Net income reached $34.2 billion in the twelve months to September 2022. The stock was then priced at just 8.1 times earnings. Today it trades at 15.3 times, nearly twice that. Net income fell in each of the next three twelve-month periods, to September 2023, 2024 and 2025.
Management's answer is more oil at low cost. Chevron plans to double production at its three Venezuela joint ventures to roughly 600,000 barrels a day of gross output by 2031. Management put the total cost of those barrels at less than $20 a barrel, far below even the third quarter's lowest oil price. Company-wide output dips in the near term, though: Chevron said on October 30 that it expects its fourth-quarter upstream production to be 175,000 to 225,000 barrels of oil equivalent a day lower because of turnarounds and downtime.
Chevron is also carrying less debt. Total debt was $33.5 billion at the end of September 2026, down from $41.5 billion a year earlier. Chevron declared a fourth-quarter dividend of $1.78 a share and said growing the dividend remains its first priority for cash.
A buyer at today's price is betting that the discount is a mistake: that Chevron's profit stays closer to the last two quarters than to the fall that followed 2022. The price appears to assume at least part of that fall again. Chevron's quarterly operating margin is the number to watch when it reports fourth-quarter results, expected in January 2027. Management expects to book a one-time non-cash after-tax loss of $3 billion to $4 billion when a deal that deconsolidates $3.7 billion of debt closes at the end of that quarter. It said the loss reflects accounting, not deal economics, and will treat it as a special item.
Does This Mean You Should Act On CVX?
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