No one knew in May 2025 how world events would impact Chevron (NYSE: CVX). The war with Iran has caused oil prices to skyrocket. As a result, the giant oil stock has soared more than 40% over the last 12 months. But where will Chevron stock be in one year? No one knows what the…
No one knew in May 2025 how world events would impact Chevron(NYSE: CVX). The war with Iran has caused oil prices to skyrocket. As a result, the giant oil stock has soared more than 40% over the last 12 months.
But where will Chevron stock be in one year? No one knows what the future holds now, just as they didn’t last year. However, it’s fair to say that Chevron’s fortunes will hinge largely on oil prices and the company’s production growth.
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An optimistic scenario for Chevron
Global energy market uncertainty is good for Chevron. As long as worries prevail, oil prices will remain high. This scenario is a real possibility if Iran continues to effectively control the critical Strait of Hormuz over the next 12 months.
Chevron’s production is booming. The company’s acquisition of Hess is bearing fruit, especially in Guyana. Production was also up significantly year over year in the first quarter of 2026 across other regions, thanks to Hess, including the Bakken and the Gulf of Mexico. Meanwhile, Chevron also grew organically in the Gulf and the Permian Basin.
Can the company continue to boost production? Absolutely. Chevron projects 7% to 10% growth in 2026. Assuming weather and downtime at its facilities don’t cause problems, the upper end of that range should be readily attainable.
Meanwhile, Chevron’s cost-cutting initiatives are moving forward. The oil and gas giant expects an additional $3 billion to $4 billion in cost reductions this year.
Sustained high oil prices, increased production plus cost reductions add up to stronger profits for Chevron. Earnings growth ranks among the top reasons why stocks go up. It’s not hard to envision Chevron’s share price rising by 20% or more one year from now with these tailwinds at its back.
Key risks
What could prevent such a rosy scenario from materializing for Chevron? The biggest risk is that oil prices fall sharply.
A settlement between the U.S. and Iran that leads to lasting de-escalation of tensions would almost certainly cause a steep decline in oil prices from current levels. Both sides have ample reasons to reach an agreement, so this remains a distinct possibility.
However, supply is only one side of the equation in driving commodity prices. Demand is just as important. Should the U.S. economy enter into recession, much of the rest of the world’s economies could follow suit. Lower oil and gas demand during an economic decline could also negatively impact Chevron’s growth over the next year.
Chevron’s stock price could be more affected than some of its peers during a recession because of its valuation. The company’s shares trade at 18.8 times forward earnings, well above ExxonMobil‘s (NYSE: XOM) forward price-to-earnings ratio of 15.2 and ConocoPhillips’(NYSE: COP) forward earnings multiple of 13.5.
How might Chevron’s stock perform in a more pessimistic environment? A double-digit percentage decline isn’t out of the question.
A prediction
The consensus Wall Street 12-month price target for Chevron reflects a potential upside of around 11%. I predict the stock will either reach that level or come close to it. This aligns well with the company’s projected average annual earnings-per-share growth of at least 10%.
My guess is that oil prices will pull back somewhat, but not enough to significantly impact Chevron. It’s important to remember that the company can cover its dividends and planned capital spending even if oil falls below $50 per barrel.
Speaking of the dividend, Chevron will almost certainly extend its streak of dividend increases to 40 consecutive years. The company isn’t a member of the Dividend Kings yet (to be part of this group, a stock must increase its dividend for at least 50 consecutive years), but it’s definitely on the right track to join the elite club.
I expect that Chevron will remain a top pick for income investors one year from now. That’s a safe bet regardless of what happens with oil prices or the economy.
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Keith Speights has positions in Chevron and ExxonMobil. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.
Prediction: Where Chevron Stock Will Be in 1 Year was originally published by The Motley Fool
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