QS Research · Michael Burry's Scion Capital analyst template · 2006
CHEVRON CORP (CVX)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction high · base case -45% · downside -55% · upside -35%
The market is capitalizing TTM windfall earnings ($62.90B EBITDA and $26.98B net income) at a $419.11B market cap and $437.99B EV, but on the FY2020-FY2025 cycle average of $41.53B EBITDA even 6.0x gives EV $249.2B, less net debt $18.88B = $230.3B equity, or $117/share, about -45% from $213.24. Downside at 5.0x normalized EBITDA is $96/share (-55%); upside at 7.0x is $138/share (-35%), so every case is below today's price. The 2026 beat is real but price-led ($97 Brent vs $69), carries large timing and special-item noise, and production fell year over year. Normalized, CVX is overvalued rather than cheap; the call is a short.
Key numbers
- Share price: $213.24
- Market cap: $419.11B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $233.33B
- EV / EBITDA (TTM): 7.0x
- P/E (TTM): 15.5x
- Price / book: 2.16x
The 15 boxes
- ✓ 1. Long-form business notes
Chevron is an integrated oil and gas company whose profit is overwhelmingly upstream-driven: FY2025 net income of $12,299M came from Upstream $12,822M and Downstream $3,022M, offset by 'All Other' of -$3,545M, and management states earnings depend mostly on upstream profitability and therefore on crude prices. The cycle is visible in the XBRL history: revenue ran $94.47B (FY2020) to a $235.72B peak (FY2022), then $196.91B (FY2023), $193.41B (FY2024) and $184.43B (FY2025), with net income falling from $35.47B to $12.30B over the same span while capex rose from $8.92B to $17.35B. The FY2025 10-K is a different company from the FY2020 10-K: Hess was acquired in July 2025 (24% of consolidated total assets, 3% of revenues at 12/31/2025), worldwide production was 3.7 MMBoe/d (+12% vs 2024) and proved reserves 10.6 billion BOE, versus a simpler upstream/downstream description and 47,736 employees at 12/31/2020.
- ○ 2. Competitive advantage
The sources do not show a durable competitive advantage: Chevron is described as primarily a commodities business whose results are driven by crude oil, natural gas, and NGL prices, and its revenue, net income, and returns swung sharply from FY2022 to FY2025. Scale is large ($184.43B FY2025 revenue; $33.94B FY2025 operating cash flow), but net margin fell to 6.7% in FY2025 from 15.0% in FY2022 and ROE fell to 6.6% from 22.3%. The only competitor reference in the sources is OPEC/other producers and unnamed competitors, not a named peer set.
- ✓ 3. 10-Q takeaways
Q3 2026 was a price-led blowout: sales were $65.237B vs $48.169B in Q3 2025, and net income was $9.924B vs $3.539B, with upstream and downstream segment earnings both up sharply. The quality is mixed: Q3 carried $1.6B unfavorable timing effects plus legal and impairment charges, downstream margins are described as potentially unsustainable, and the 10-Q gives no cash, inventory, buyback or formal guidance data. Normalized cyclical valuation should separate timing and asset-sale/tax items from operating earnings and treat the 9M 2026 run-rate cautiously because Brent averaged $94/bbl vs $71/bbl a year earlier.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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