Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Chevron Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.0% to 0.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 37, DPO 51, DIO 22). At a 7.1% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $324.14 per share, suggesting CVX is undervalued by 55.8% at the current price of $208.10.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 49,033 | 49,607 | 50,959 | 55,428 | 55,495 | 56,883 |
| (−) Net Interest | 742 | 751 | 771 | 839 | 840 | 861 |
| (+) D&A | 13,940 | 15,181 | 15,682 | 15,490 | 15,435 | 15,821 |
| EBITDA | 63,715 | 65,539 | 67,412 | 71,757 | 71,771 | 73,565 |
| (−) Tax | 15,266 | 15,445 | 15,866 | 17,258 | 17,278 | — |
| (−) CapEx | 14,308 | 14,476 | 14,870 | 16,175 | 16,194 | — |
| (−) ΔWC | 44 | 101 | 237 | 785 | 12 | — |
| Free Cash Flow (FCF) | 34,096 | 35,517 | 36,438 | 37,540 | 38,286 | — |
| Peers' EBITDA Multiple | 10.2x | |||||
| Terminal Value | 753,304 | |||||
| WACC / Discount Rate | 7.12% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 32,944 | 32,038 | 30,685 | 29,513 | 28,100 | 534,200 |
| Enterprise Value | 687,479 | |||||
| Projection Period | 153,279 | 22.3% | ||||
| Terminal Value | 534,200 | 77.7% | ||||
| (−) Current Net Debt | 40,276 | |||||
| Equity Value | 647,203 | |||||
| (÷) Outstanding Shares | 1997M | |||||
| Fair Price | $324 | +55.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.2x | 8.2x | 10.2x | 12.2x | 14.2x |
|---|---|---|---|---|---|
| 5.1% | $239 | $297 | $354 | $412 | $469 |
| 6.1% | $229 | $284 | $339 | $394 | $448 |
| 7.1% | $220 | $272 | $324 | $376 | $429 |
| 8.1% | $211 | $260 | $310 | $360 | $410 |
| 9.1% | $202 | $250 | $297 | $345 | $392 |
Current price: $208.10. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.