Chevron (CVX US): Buy: De-risked growth with room to run

Research evidence excerpt

Chevron (CVX US): Buy: De-risked growth with room to run

Equities ● Oil & Gas

3 August 2026

Chevron – 2Q26 conference call highlights

Financials and guidance

For a recap of previous quarters, see Chevron: Clean upstream growth, strong value capture (5

May 2026), Chevron: Position of strength priced in (2 February 2026) and Chevron: De-risking

growth, leveraging technology (13 November 2025).

◆ Chevron largely maintained its 2026 production guidance, calling for 7-10% y-o-y to

3,980-4,100kbd. It updated capex to the low end of the USD18-19bn range.

◆ Annual run-rate structural cost reductions of USD3bn is up from USD1.5bn at the end of

2025, with Chevron achieving its USD3-4bn (unchanged) target by the end of 2026 about

six months early. Management believes more than 70% of the savings came from efficiency

gains (up from more than 60% previously) and are expected to be durable vs the balance

from divestments. HSBC view: We believe Chevron is likely to reach the upper end of its

USD3-4bn of structural cost reduction target by year-end.

◆ Chevron also achieved annual run-rate Hess synergies of USD1.5bn, also about six

months early. Recall Chevron achieved the initial USD1bn in Hess synergies within three

months of close instead of the 12-month target, resulting in management raising the 1-year

target to USD1.5bn (up 50%).

◆ Timing effects partly reversed in 2Q, with USD1.4bn of favourable effects vs USD2.9bn of

unfavourable effects in 1Q for mark-to-market of financial derivatives and LIFO inventory

accounting – implying a USD4.4bn q-o-q positive delta. HSBC view: We expect most of the

1Q negative timing effects to reverse over time in FY26. We believe that best practice

should be to exclude timing effects from “adjusted” earnings, in line with European majors’