This article first appeared on GuruFocus.
Chevron (NYSE:CVX), the integrated oil-and-gas giant, rallied approximately 2.3% to $206.355 Monday morning as escalating U.S.-Iran fighting sent Brent crude above $90 per barrel. Energy stocks surged while nearly every other major U.S. sector buckled under mounting inflation and interest-rate pressure.
Warning! GuruFocus has detected 7 Warning Sign with CVX.
Is CVX fairly valued? Test your thesis with our free DCF calculator.
Higher crude prices are feeding Chevron's profitsand Washington's frustration. President Donald Trump is pressuring refiners as average gasoline prices exceed $4 per gallon, even as the White House says U.S. refining capacity is already running near its limit. Chevron enters that showdown with $12.1 billion in second-quarter earnings and worldwide production up 20%.
That quarterly profit alone represents roughly 3% of Chevron's market value, showing how quickly an oil-price spike can power the equity story. But investors are already paying up: the $206.355 share price stands 28.47% above the $160.62 GF Value estimate. Monday's rally captures the crude upside, while the widening valuation premium and political push for cheaper fuel leave little room for disappointment.