Chevron (CVX), a global oil giant, is a dominant force in the energy sector, with operations in over 180 countries. But in Venezuela, its grip is slipping.
CVX stock dipped on Wednesday, slipping by 1.1% as President Donald Trump announced that he was revoking its Venezuelan oil (CBK25) license. The reason was Venezuela’s allegedly sluggish response to repatriating U.S.-bound migrants. Despite sanctions against President Nicolas Maduro’s regime, Chevron had secured a rare permit to pump and market oil, but with strict conditions, including an exit deadline by the end of July 2025.
Chevron, the lone major American oil producer still operating in Venezuela, had been a crucial force, producing over 200,000 barrels daily by mid-2024. With its help, Venezuela had pushed oil production beyond 1 million barrels per day. President Joe Biden had previously widened Chevron’s production and sales scope, but the company remained cautious, citing the license’s short-term nature.
Therefore, with CVX stock taking a hit, should investors sell this dividend-paying oil giant now or buy the dip?
About Chevron Stock
Headquartered in Houston, Texas, Chevron (CVX) is one of the world’s largest publicly traded oil and gas companies. With a market cap of $275.8 billion, Chevron’s influence is as vast as the energy it provides.
The company operates through both the upstream and downstream segments, and is also involved in the chemicals business. Its oil and gas (NGJ25) development pipeline is considered one of the best in the industry, setting it apart from the competition.
Despite losing its Venezuelan oil license and the stock taking a slight dip after the news, CVX stock has surged 8.9% on a YTD basis. While the setback threatens short-term flows, oil prices could rise, balancing the scales.
Valuations tell a compelling story. CVX trades at 14.38 times forward earnings and 1.35 times sales, outpacing sector averages of 11.63x and 1.39x. The premium valuation reflects confidence in CVX’s long-term growth potential.
Meanwhile, Chevron’s dividend is a fortress. The board just boosted payouts by 5%, extending its 38-year streak of increases. On Feb. 14, the company announced a dividend of $1.71 per share, payable to the shareholders on March 10.
The company’s annual payout stands at $6.84 per share, translating to a yield of 4.34%. Plus, with a 64.9% payout ratio, Chevron balances shareholder rewards with reinvestment. Even as markets wobble, this oil titan keeps cash flowing, proving why income investors stay loyal.
Chevron’s Mixed Q4 Earnings
On Jan. 31, Chevron reported its fiscal Q4 earnings results, posting $52.2 billion in revenue, up 10.7% year-over-year and beating Wall Street’s estimate. The boost came from higher-than-expected U.S. production in its key upstream segment. However, adjusted EPS amounted to $2.06, falling from the previous year’s $3.45 and missing the projection by 5.9%. Weaker oil price realizations and lower refined product sales margins weighed the bottom line.
Looking ahead, Chevron remains focused on expansion and efficiency. The company completed several Gulf of Mexico projects last year and delivered two more significant projects in 2024. Cost-cutting is also a priority, with plans to reduce expenses by $2 billion to $3 billion by the end of next year.
Additionally, capital spending for 2025 is expected to range between $14 billion and $16 billion. These initiatives position Chevron to generate even more free cash flow, with management expecting to add $10 billion of annual FCF in 2026, led by growth and advantaged upstream assets. Meanwhile, the proposed acquisition of Hess (HES) remains in progress.
Analysts tracking Chevron project the company’s fiscal 2025 EPS to rise 7.4% year over year to $10.79, with fiscal 2026 EPS forecast to climb another 16.7% to $12.59.
Trump’s Move Jolts Chevron, Fuels Oil
Chevron just hit a geopolitical wall with Trump’s decision, which slammed the brakes on Chevron’s extraction and export of approximately 240,000 barrels of Venezuelan crude oil daily to the U.S. This severs a vital revenue stream and erases its unique edge in a nation with the world’s largest oil reserves. Investors panicked, and CVX slumped. Meanwhile, oil prices (CLJ25) surged 2% as traders braced for a tighter supply.
A Reuters poll of 41 economists forecast Brent crude (CBJ25) averaging $74.63 per barrel in 2025, up slightly from January’s $74.57 forecast, with U.S. crude expected at $70.66. Despite regulatory setbacks, Chevron could capitalize on higher oil prices and industry resilience.
Higher crude prices should boost Chevron’s global revenues, but losing Venezuelan heavy oil disrupts U.S. refineries and shakes its long-term strategy. Now sidelined, Chevron watches as rivals circle. This move could cost billions, or, if oil prices stay high, turn into an unexpected win.
What Do Analysts Expect for Chevron Stock?
Analysts remain bullish on CVX, with firms like Barclays, Royal Bank of Canada, and UBS setting price targets between $160 and $194. The company’s strong dividend yield, growth potential, cost management, and sustainability initiatives make it a top investment choice in the oil industry.
CVX continues to shine in the eyes of investors, remaining a darling among analysts. Overall, the stock has a “Strong Buy” rating from the 22 analysts covering CVX. Out of that, 15 suggest a “Strong Buy,” two advise a “Moderate Buy,” and the remaining five back a “Hold” rating.
CVX’s average analyst price target of $176.91 represents potential upside of 12.9%, while the Street-high target of $203 suggests that the stock can climb as much as 29.6% from here.
