Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
CVX· Energy
Chevron
Chevron is a well-run oil major selling at 33 times earnings, which is a steep price for a business whose profits I cannot predict.
Buffett fit
Partial fit
Owner
23
Durability
52
Management
92
Price
21
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Energy stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Chevron I would admire how the managers run it and despair at what I have to pay for it.
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The world will burn oil for a long while yet, so Chevron will not vanish, but durability is not the same as growth.
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Here Chevron shines, and the management score of 92 is earned. They convert net income into at 1.35 times, they have quietly shrunk the share count by about 0.9 percent a year, is a conservative 0.25, and interest is covered almost 12 times over.
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There is none at this price, and that is the heart of the matter. The yield is 4.5 percent and the price to earnings ratio is 32.9, which means I am paying a growth multiple for a business with shrinking earnings.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Exceptional , reflected in a management score of 92 and that runs at 1.35 times reported net income.
- 2A conservative balance sheet with of only 0.25 and net debt to EBITDA below 1.0 at 0.99.
- 3Interest is covered 11.6 times over, so a bad year in the oil market will not threaten solvency.
- 4Management returns cash to owners, steadily reducing the share count by about 0.9 percent per year.
Concerns
7- 1The valuation is the first and largest problem: a price to earnings ratio of 32.9 and EV to of 24.3 are growth multiples on a business that is not growing.
- 2Trailing has collapsed to 3.3 percent, far below the five year figure of 11.1 percent.
- 3Earnings per share have shrunk about 5 percent a year, the opposite of what you want to pay up for.
- 4The yield of 4.5 percent and earnings yield of 3.0 percent are skimpy rewards for owning a cyclical commodity producer.
Price history
$227+101.0%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Chevron pumps oil and gas out of the ground, refines it, and sells fuel and chemicals, so its revenue rises and falls with a commodity price it does not set. The of 8.4 percent and a of 25.4 percent tell you the spread is thin and the capital intensity is heavy. Revenue grew about 4.3 percent a year over the cycle, but earnings per share actually shrank by roughly 5 percent annually, which is what happens when the product is sold at whatever the world decides on any given morning.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Energy
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