Chevron: Structural Growth, Cash Generation, and Robust Capital Returns Support Buy Rating Despite Near-Term Execution and Commodity Risks

Goldman Sachs analyst Neil Mehta has maintained their bullish stance on CVX stock, giving a Buy rating yesterday.

Neil Mehta has given his Buy rating due to a combination of factors tied to Chevron’s long-term growth and cash generation profile. He emphasizes that major upstream projects and ongoing efficiency measures are set to drive meaningful increases in production and free cash flow, supported by roughly $1.5 billion in structural cost reductions targeted for 2025. Mehta also underscores the quality and potential of Chevron’s upstream asset base, particularly in Guyana, Kazakhstan, the Permian, and the Gulf of America, as key pillars of future value. In addition, he points to the company’s robust capital return framework, projecting around $26 billion in combined dividends and buybacks over 2026–2027, implying an attractive return of roughly 7% to shareholders.

At the same time, Mehta acknowledges execution and macro risks, including operational issues in Kazakhstan, heavier-than-expected downtime in early 2026, and Chevron’s relatively high sensitivity to commodity prices, which could weigh on near-term earnings if oil and gas prices weaken. Nonetheless, he believes the medium- to long-term outlook remains favorable, anchored by expected volume growth of 7%–10% in 2026 (excluding asset sales) as Hess assets and new offshore projects ramp up. He also highlights management’s continued focus on disciplined capital allocation, potential asset sales, share repurchases, and developments in the power and exploration businesses as additional upside levers. Overall, Mehta’s updated price target of $187 reflects his view that, despite short-term challenges, the structural growth and cash return story justifies a Buy rating on Chevron shares.

According to TipRanks, Mehta is a 5-star analyst with an average return of 9.1% and a 59.12% success rate. Mehta covers the Energy sector, focusing on stocks such as Chevron, Cenovus Energy, and Suncor Energy.

In another report released yesterday, DBS also maintained a Buy rating on the stock with a $190.00 price target.