Is it the war? Is it something that Donald Trump posted? There might be a myriad of challenges facing Chevron today, but is there a clear reason why its stock collapsed by more than 6% today?
As you know, we like to cover Dow Jones companies here at DisruptionBanking. We have also been covering Chevron of late due to the fluctuations in the price of Oil, not to mention the war. However, the drop in price today didn’t just take us by surprise. Yesterday analysts and reporters were mainly bullish on Chevron, then the share price collapsed… Everyone was taken by surprise.
Yesterday, when Chevron stock was trading at $210.71 (well above today’s lows of $197.40) Simply Wall St posted how Chevron may be 43.6% undervalued with an estimated intrinsic value of $373.69 per share.
Zacks Investment Research posted today about whether investors are considering taking profits from Chevron stock. Zacks Investment Research highlighted Chevron’s remarkably low breakeven price of below $50 per barrel as a competitive advantage.
On top of that, Warren Buffett’s Berkshire Hathaway is long on Chevron to the tune of $19.8 billion. So, what went wrong?
Why did Chevron Stock Collapse?
At 9:30 a.m. Eastern, Chevron shares were already down 2%. By noon, the selling accelerated. While profit-taking after a strong run was certainly part of the story, a more specific and concerning development emerged from Australia.
Yesterday, Reuters reported that Chevron’s Wheatstone LNG facility off Western Australia suffered extensive damage from Tropical Cyclone Narelle. Both LNG production trains at the 8.9 million-ton-per-year plant are currently offline after damage to air-cooled heat exchangers (fin fans).
Chevron’s director of operations and maintenance for Australia said the damage at Wheatstone was more extensive than at its Gorgon facility and worse than in previous cyclones. The company indicated on Sunday that full production is unlikely to resume for several weeks.
Wheatstone is an important part of Chevron’s LNG portfolio, supplying both export cargoes to Asia and domestic gas. LNG remains one of Chevron’s highest-margin businesses, so investors are pricing in near-term lost production, delayed cargoes, and repair costs.
By the time of writing, Chevron had fallen from $210.71 to around $197.40, a decline of approximately 6%, erasing roughly $25 billion in market value in a single session.
What Happens Next?
Investors will watch for:
- Further updates from Chevron on the repair timeline
- Any potential force majeure declarations on LNG contracts
- Impact on Q1 earnings and full-year guidance (due in late April)
A shutdown lasting several weeks could pressure near-term cash flow and production targets.
While Chevron remains a diversified and financially strong major, today’s drop is a reminder of the operational risks inherent in large-scale energy infrastructure. Especially in cyclone-prone regions.
Author: Andy Samu
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
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Chevron: The Last Oil Giant in Dow Jones | Disruption Banking
