Company Specific Trends Impacting Chevron

+7.04%
Upside
156
Market
167
Trefis
CVX: Chevron logo
CVX
Chevron

Chevron (NYSE:CVX) is one of the largest energy companies in the world, and competes with other established oil producers like Exxon Mobil (NYSE:XOM), ConocoPhillips (NYSE:COP), BP (NYSE:BP) and Anadarko (NYSE:APC). Below we take a quick look at a few key trends affecting Chevron, and examine how these effects could shape the company’s outlook.

Our price estimate for Chevron’s stock stands at $104, in line with market price.

Relevant Articles
  1. Down 18% Since 2023, How Will CVX Stock Trend Post Q4 Results?
  2. Down 13% This Year Will Chevron Stock Rebound After Its Q3?
  3. What To Expect From Chevron’s Stock Post Q2?
  4. Chevron Stock Down 13% Over Six Months, What’s Next?
  5. Chevron’s Q4 Earnings: What Are We Watching?
  6. What’s Next For Chevron’s Stock?

Chevron is trimming its downstream business, plans to focus more on upstream

In early 2010, Chevron announced a strategy to trim its downstream business of refining, marketing and transportation operations. This segment has struggled when it comes to profitability. We estimate that EBITDA margins for this segment declined from 3.9% in 2006 to about 1.2% in 2009.

However, this EBITDA margin recovered to about 2.3% in 2010 as a result of improving prices and the company’s own strategic efforts. Chevron has been cutting employee count in its downstream business and plans to focus on the more profitable oil & natural gas exploration and production business.

Chevron is also embracing alternative energy solutions

Even though Chevron’s business is dependent on non-renewable energy sources like crude oil and natural gas, the company is also focused on embracing alternative energy solutions. The company’s solar portfolio consists of about 22 megawatts of generated capacity, with more than 128,000 solar panels installed.  Chevron is also involved in the development of solutions that convert waste streams of organic material into on site power for waste-water treatment plants. As of now, these are loss making businesses which we account for in costs to the company for modeling purposes.

See our complete analysis for Chevron’s stock here