TD Cowen has reiterated a Hold rating on Chevron (NYSE: CVX) and maintained a $168.00 price target, according to a research note published Monday. That target is below Chevron's recent trading level of $181.30, with the stock trading close to its 52-week high of $182.59.
Within the broader analyst community, TD Cowen's position aligns with a consensus that also skews toward Hold. Available price targets across analysts range between $162 and $212, reflecting differing views on near-term valuation and strategic direction.
The research note outlined several strategic priorities for Chevron. TD Cowen said the company appears to be prioritizing margin expansion over increasing production volumes and is comfortable with its existing operations in the Permian Basin. The firm also reported that Chevron has indicated it will not direct additional capital to Venezuela for at least the next 18-24 months, while it continues to emphasize opportunities in the Middle East.
Using InvestingPro data, TD Cowen observed that Chevron seems overvalued at the current share price relative to its Fair Value estimate, despite the company's solid financial health score and a dividend yield of 3.94%.
Following meetings between TD Cowen analysts and Chevron investor relations representatives, the note added that Chevron expects to reach a final investment decision on a power project in the first half of 2026.
TD Cowen also addressed market reports concerning Lukoil's international assets, which have been put up for sale. While recent coverage has speculated on potential interest from several buyers, TD Cowen provided its own estimates for the assets' value. The firm placed a notional value on the upstream assets at approximately $11.3 billion, with Kazakhstan-related assets estimated near $4 billion.
On a cash-flow basis, TD Cowen calculated that the entire upstream asset portfolio could generate about $1.6 billion of free cash flow in the first year, with the Kazakhstan portion alone potentially delivering approximately $0.8 billion. The research note also said that any acquisition by Chevron would likely require a cash purchase.
Other broker commentary cited in the note shows a recent uptick in price targets after Chevron's quarterly results and corporate developments. BMO Capital raised its target to $190 and retained an Outperform rating, citing better-than-expected fourth-quarter results and an encouraging outlook through 2030. JPMorgan raised its target to $181 and highlighted Chevron's cost-saving initiatives and the completion of its merger with HES as influential factors. These revisions contributed to a broader reassessment of Chevron's near-term outlook among some analysts.
The note also cataloged recent moves that reflect Chevron's active role in expanding its global exploration and production footprint. Chevron signed a deal with Turkey's state-run Turkish Petroleum Corp to jointly pursue oil and gas exploration worldwide. Separately, reports indicate that the U.S. government is planning to grant a license for oil and gas production in Venezuela, and Mercuria Energy Group has been engaged in talks with Venezuela's state oil company PDVSA. TD Cowen observed that these developments are consistent with heightened interest and activity around Venezuelan assets as U.S. sanctions have eased.
Taken together, TD Cowen's reassessment and the actions of other brokers underscore a mix of strategic caution and opportunism in Chevron's approach - a focus on margin improvement, selective capital deployment, and participation in global exploration opportunities - even as valuation questions remain at current share prices.
Key points
- TD Cowen reaffirmed a Hold rating and a $168 price target for Chevron, below the current trading price near a 52-week high - impacting energy sector equity valuations and investor expectations.
- The firm highlighted Chevron's strategic emphasis on margin expansion over production growth, a pause on Venezuela capital for 18-24 months, and continued attention to Middle East opportunities - relevant to upstream oil and gas investment trends.
- TD Cowen estimated potential values and first-year free cash flow for Lukoil's international upstream assets and Kazakhstan assets amid market reports of those assets being for sale - relevant to M&A activity in the oil and gas sector.
Risks and uncertainties
- Valuation risk: TD Cowen noted Chevron appears overvalued relative to its Fair Value estimate at current prices, which could affect equity returns in the energy sector if market sentiment shifts.
- Asset acquisition and financing risk: Any purchase of Lukoil's international upstream assets would likely require cash payment, introducing financing and integration uncertainties for potential buyers in the oil and gas M&A market.
- Geopolitical and licensing uncertainty: Moves related to Venezuela - including prospective U.S. licensing for production and discussions between other energy firms and PDVSA - create a fluid policy and geopolitical environment that could influence project timelines and regional investment flows.