Is Chevron Corp. overvalued or undervalued?

As of 7 July 2025, Chevron Corp. has moved from an expensive to a very expensive valuation grade. The company is overvalued based on its current metrics, with a P/E ratio of 20, a Price to Book Value of 2.12, and an EV to EBITDA of 9.77. In comparison, peers like Exxon Mobil Corp. have a P/E of 28.35 and an EV to EBITDA of 15.29, while Hess Corp. shows a P/E of 16.91 and an EV to EBITDA of 7.90, indicating that Chevron's valuation is significantly higher than its industry counterparts.
Despite a solid dividend yield of 4.02% and a ROE of 10.55%, the company's returns have lagged behind the S&P 500, particularly over the longer term, with a 3-year return of just 1.53% compared to the S&P 500's 70.41%. This underperformance further supports the conclusion that Chevron is overvalued in the current market.