Chevron's Q1 2025: A Gusher of Resilience in Rocky Markets?

Let me tell you, folks, Chevron isn’t just weathering this market storm—it’s drilling straight through it. UBS’s latest analysis of Chevron’s Q1 2025 results isn’t just a bullish call; it’s a roadmap for how this energy giant is turning strategic bets into shareholder gold. Here’s why investors should sit up and take notice.

The Numbers Don’t Lie: Chevron’s $2.08 EPS Is Just the Tip of the Iceberg

UBS is forecasting Chevron’s Q1 earnings per share to hit $2.08, a figure that might seem modest at first glance. But dig deeper, and you’ll find this EPS isn’t just about oil prices—it’s about execution. Chevron’s Future Growth Project (FGP) in Kazakhstan’s Tengiz field is the real game-changer here. This project, set to add 260,000 barrels of oil equivalent per day by 2026, isn’t just a产能提升—it’s a cash flow time bomb waiting to detonate. And then there’s TCZ, Chevron’s 50%-owned affiliate in Tengizchevroil, which is nearing full capacity. UBS estimates TCZ alone could pump $5 billion annually into Chevron’s coffers, acting as a stabilizer even if oil prices dip.

But here’s the kicker: Chevron’s buybacks are expected to drop to $3.5 billion, down from over $4 billion last quarter. You might say, “Jim, that’s a cut!” And you’re right—but it’s a calculated move. With Brent crude sliding toward $65 per barrel, Chevron’s pulling back on share buybacks to conserve cash. This discipline is exactly what I’d expect from a company with a net debt ratio of just 10%—they’re not here to panic.

The “Buy” Rating Isn’t Just a Label—It’s a Bet on Chevron’s Future

UBS isn’t just tossing around a “Buy” rating. They’ve crunched the numbers and raised their price target to $177, implying a 30.2% upside from Chevron’s current price of $135.67. Let that sink in: a $40+ jump from here. Why? Because Chevron’s long-term vision isn’t just about surviving—it’s about dominating.

Look at that chart! While the S&P 500 has crept up 3.2% over the past year, Chevron’s stock has sagged 16.2%. But UBS sees this as a buying opportunity. Chevron’s $10 billion annual free cash flow target by 2026 is no pipe dream. The FGP’s completion and TCZ’s dividends are the twin engines powering this train.

Dividends and Discipline: Chevron’s Ironclad Strategy

Chevron’s 5% dividend increase in Q1 marks 38 straight years of raises—a streak only a handful of companies can claim. That’s not just a streak; it’s a promise. And here’s the kicker: even as buybacks dip, Chevron’s dividend payout ratio remains comfortably low, leaving room to grow both dividends and projects.

Meanwhile, the company’s pivot into biofuels and carbon abatement isn’t just greenwashing—it’s smart diversification. UBS loves this, calling it a “strategic pivot” that positions Chevron to lead in the energy transition.

The Elephant in the Room: Oil Prices and Global Demand

Now, let’s not sugarcoat it. Chevron isn’t immune to the oil market’s volatility. With Brent at $65, margins are squeezed, and US-China trade tensions are clouding demand. But here’s where Chevron’s balance sheet shines: that 10% net debt ratio means it can weather a $60 oil price scenario better than most.

UBS even ran the numbers: $5 billion in annual affiliate dividends act as a cushion, insulating Chevron from price swings. And when oil rebounds—when, not if—Chevron’s high-return projects like the FGP will explode onto the scene.

Conclusion: Chevron’s Q1 Isn’t Just a Quarter—It’s a Statement

So what’s the bottom line? Chevron’s Q1 2025 results aren’t just about hitting an EPS target—they’re about proving that disciplined execution and strategic patience pay off. With UBS’s $177 price target, a fortress balance sheet, and projects that could add billions in cash flow, this isn’t a stock to ignore.

The data screams opportunity:
- 30.2% upside potential from current levels.
- 260,000 boepd from FGP by 2026.
- $10 billion in annual free cash flow by 2026.
- 38 years of dividend growth—a streak no recession has broken.

Chevron’s Q1 is a blueprint for energy investing in 2025 and beyond. For those willing to look past short-term oil dips and buybacks, this could be the moment to drill into Chevron—and let the dividends flow.

This isn’t just an investment—it’s a bet on resilience. And right now, Chevron’s got more resilience than most.