UBS Adjusts Price Target on Chevron to $235 From $220, Maintains Buy Rating

UBS raised Chevron's Q3 earnings forecast to $11.4 billion, with refining profits expected to offset declines in upstream earnings. The bank reduced production estimates and noted weaker petrochemical margins. Chevron's Q3 performance is seen as more integrated, with refining playing a significant role. Results are due in late October.

Oil prices rose, with Brent crude above $105/barrel and WTI near $92, due to Iran tensions and a tropical storm threatening Gulf Coast platforms. Chevron evacuated nonessential personnel. The IEA's stockpile release had limited impact. Higher energy costs may influence Fed policy. Gasoline and diesel prices remained elevated at $4.36/gallon and $6.28/gallon, respectively.

Shell, Chevron, and Harbour Energy are reducing Gulf of Mexico oil production and evacuating personnel due to Hurricane Isaias. By Wednesday, 25% of Gulf oil output (511,619 barrels/day) and 16% of gas production were offline. Isaias, the first 2026 Atlantic hurricane, is expected to hit the northern Gulf Coast. Oil prices rose Thursday, with Brent crude up 5% to $105.23/barrel and WTI at $92.70/barrel.

Brent crude oil prices rose 5% to $105/barrel due to Middle East tensions and Gulf of Mexico hurricane disruptions. UK 10-year gilt yields hit 5.53%, a 17-year high. Shell and Chevron halted Gulf operations. Supply concerns drove market volatility, with inflation and interest rate fears cited.

UBS raised its price target for Chevron (NYSE: CVX) to $235 from $220, citing stronger refining margins and higher earnings estimates. The firm projects Q3 2026 EPS of $4.93, up from $4.15, and expects $16.3B in cash flow. Chevron's stock is trading at $205.15, below its Fair Value of $221.74. The company has a market cap of $402B and a 38% YTD return. HSBC also raised its target to $250, noting Chevron's upstream sector strength.

Chevron (CVX) will exit Hess Midstream (HESM) via a swap, retaining infrastructure use at lower costs. Chevron expects a $3-4B after-tax loss but anticipates 50% cost savings in Bakken midstream operations. Hess Midstream will acquire Chevron's DJ Basin assets and become independent, with the deal expected to close by year-end.