Chevron Corp: 2Q26 Preview: Anticipating a Sizeable Beat at 1Q Headwinds Turn into 2Q Tailwinds as CVX Turns the Corner from an Execution Standpoint

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Chevron Corp: 2Q26 Preview: Anticipating a Sizeable Beat at 1Q Headwinds Turn into 2Q Tailwinds as CVX Turns the Corner from an Execution Standpoint

tilizing the elevated oil price environment to focus on the balance sheet. Q1 2.18 1.41A 2.84

Q2 1.77 5.91 2.75

• Upstream: We forecast 2Q26 adjusted upstream earnings of ~$8.39bn, which Q3Q4 1.861.52 3.783.29 2.842.76

is ~$4.25bn above the company’s upstream earnings of $4.14bn in 1Q. In terms FY 7.29 14.38 11.20

of the 2Q26 earnings bridge, we anticipate the surge in 2Q26 oil and

international gas volumes to drive a ~$2.9bn sequential increase in earnings, Style Exposure

while better-than-expected production performance as well as lower downtime

associated with turnarounds should also drive a further $100-200mm increase

in earnings, although this impact will be partially mitigated by the reversal of

1Q26 overlifts in their International Upstream segment. The company has

guided to $2.5bn of affiliate distributions (we assume the majority of

distributions from TCO), but this is subject to a 15% withholding tax, which

would drive a $350-400mm headwind. In total, these items net to a ~$2.5bn

sequential increase in earnings. In 1Q26, the company reported $1.1bn of

negative timing impacts given the increase in Brent oil prices during the

quarter. Given the decrease in Brent prices during 2Q26, we expect a positive

~$0.5bn tailwind from timing effects in 2Q26. In total, we are modeling $8.4bn

of earnings from Upstream. We forecast 2Q26 total production of 4,045 MBoe/

d, which compares with the company’s 1Q26 production of 3,859 MBoe/d and

the 2Q26 Street consensus of 4,015 MBoe/d.

• Downstream: We estimate adjusted earnings of $4,200mm for the quarter

(compared to a -$465mm loss in 1Q), with our higher sequential earnings being