Valued at a market cap of $274.2 billion, Chevron Corporation (CVX) is a leading integrated oil and gas company headquartered in Houston, Texas. It operates across the entire energy supply chain, from the exploration and production of crude oil and natural gas to transportation, refining, marketing, chemical manufacturing, and power generation.
This energy giant has underperformed the broader market over the past 52 weeks. Shares of CVX have declined 3.8% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17%. Moreover, on a YTD basis, the stock is up 6%, compared to SPX’s 8.2% rise.
However, zooming in further, CVX has outpaced the First Trust Nasdaq Oil & Gas ETF’s (FTXN) 9.3% loss over the past 52 weeks and 1.8% drop on a YTD basis.
On May 2, shares of CVX surged 1.6% after reporting mixed Q1 results. Due to a 1% decline in sales and other operating revenues coupled with lower income from equity affiliates, the company's top line fell 2.3% year-over-year to $47.6 billion, missing consensus estimates by 2.2%. Meanwhile, its adjusted EPS of $2.18 also decreased 25.6% from the year-ago quarter, but surpassed Wall Street's expectations by 1.4%. Despite changing market conditions, its cost discipline efforts continued to support its profitability.
For the current fiscal year, ending in December, analysts expect Chevron’s EPS to drop 27.8% year over year to $7.26. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in two of the last four quarters, while falling short on two other occasions.
Among the 22 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on 11 “Strong Buy,” three "Moderate Buy,” six “Hold,” and two "Strong Sell” ratings.
This configuration is less bullish than three months ago, with 12 analysts suggesting a “Strong Buy” rating, and one recommending a “Strong Sell.”
On Jul. 29, Evercore Inc. (EVR) analyst Stephen Richardson gave a “Buy” rating on CVX and set a price target of $180, implying a 17.2% potential upside from the current levels.
The mean price target of $163.64 represents a 6.6% premium from Chevron’s current price levels, while the Street-high price target of $186 suggests an upside potential of 21.1%.
