BofA Maintains Buy Rating on Chevron with $206 Target Amid Strong Earnings

BofA's Rating on Chevron#

BofA Securities has reiterated a Buy rating on Chevron (NYSE:CVX) and set a price target of $206. This decision comes after Chevron reported strong quarterly results that exceeded expectations.

Strong Earnings Performance#

Chevron's earnings per share (EPS) came in at $1.41, significantly higher than BofA's estimate of $0.79 and the consensus estimate of $0.90 from other analysts. The company had previously projected impacts from market volatility to be between $2.7 billion and $3.2 billion, with actual impacts reaching $2.9 billion. This strong performance supports Chevron's impressive dividend history, as the company has raised its dividend for 38 consecutive years, currently offering a yield of 3.68%.

U.S. Refining Operations#

In its U.S. refining segment, Chevron reported earnings of $556 million, which far exceeded BofA's negative estimate of $158 million and the Street's forecast of $7 million. This positive performance was attributed to higher throughput and effective capture, aided by regulatory waivers and opportunities for international exports.

Free Cash Flow and Future Guidance#

Chevron's free cash flow, excluding working capital, reached $3.1 billion, surpassing both BofA's estimate of $2.5 billion and the Street's $2.8 billion forecast. This outperformance was mainly due to lower capital expenditures, although the company maintained its guidance range of $18 billion to $19 billion. Chevron's stock has risen 48% over the past year, currently trading at $190.77, with a market capitalization of $379.76 billion. However, some analyses suggest the stock may be overvalued compared to its Fair Value.

Share Repurchase and Cost Reductions#

Management has kept its share repurchase guidance steady at $2.5 billion to $3 billion for the quarter. Additionally, Chevron is aiming for structural cost reductions of $3 billion to $4 billion by the end of 2026. Despite a recent mixed earnings report for Q1 2026, where Chevron's revenue fell short of expectations, the company's strong earnings have drawn attention from investors and analysts.