Chevron Corporation (NYSE: CVX) is set to announce its fiscal first-quarter earnings on Friday, May 2, 2025, with analysts expecting earnings of $2.15 per share on $48.39 billion in revenue. This would indicate a 28% decrease in earnings compared to the previous year, despite a 4% rise in sales relative to last year’s figures of $2.97 per share and $46.74 billion in revenue. Historically, Chevron’s stock has tended to underperform after earnings reports, having dropped 53% of the time with a median one-day decline of 3.5% and a maximum observed decline of 7%.
While the company has indicated that demand could weaken due to U.S. tariffs and OPEC’s increased production, it remains devoted to its existing capital spending plan. Chevron has a robust financial standing, boasting a market capitalization of $238 billion, trailing twelve-month revenue of $193 billion, and net income of $18 billion. Although short-term performance will primarily depend on how the actual results stack up against consensus predictions, historical trading behaviors imply potential downside volatility, which may be significant for event-driven investors assessing near-term strategies.
For event-driven traders, past patterns may provide an advantage, whether by positioning themselves prior to earnings announcements or responding to movements after the release. That being said, if you’re looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative and has outperformed the S&P 500, yielding returns exceeding 91% since its inception. See earnings reaction history of all stocks.
Chevron’s Historical Odds of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 19 earnings data points recorded over the last five years, with 9 positive and 10 negative one-day (1D) returns documented. In essence, positive 1D returns were observed about 47% of the time.
- Remarkably, this percentage rises to 64% if we assess data for the last 3 years instead of 5.
- The median of the 9 positive returns = 1.2%, while the median of the 10 negative returns = -3.5%
Additional information for observed 5-Day (5D) and 21-Day (21D) returns post earnings is summarized alongside the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though not effective if the correlation is weak) is to understand the correlation between short-term and medium-term returns post earnings, identify a pair that has the highest correlation, and implement the suitable trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader can place themselves “long” for the subsequent 5 days if the 1D post-earnings return is positive. Here is some correlation data derived from 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and following 5D returns.
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