With a market cap of $301.2 billion, Chevron Corporation (CVX) is a major player in the global oil and gas industry. It operates through Upstream and Downstream segments and boasts one of the industry's leading development project pipelines. Founded in 1879, San Ramon, California-based Chevron is making big moves with expansions in Kazakhstan, offshore gas fields in the Mediterranean, new developments in the Gulf of Mexico and new fields for discovery in Brazil.
Shares of the energy giant have underperformed the broader market over the past year. CVX has surged 4.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 28.9%. In 2024, Chevron’s stock rose 8%, while $SPX rose 11.1% on a YTD basis.
Narrowing the focus, CVX's price performance trails behind the S&P Oil & Gas Expl & Prod SPDR (XOP). The exchange-traded fund has soared 27.7% over the past year, surpassing CVX’s single-digit return for the same period.
Chevron's stock has been underperforming due to uncertainty surrounding its acquisition of Hess Corporation (HES), especially with Exxon Mobil Corporation's (XOM) arbitration case over rights to buy HES' stake in the Stabroek block offshore Guyana. However, CVX dismisses XOM's case as lacking merit and remains confident in closing the Hess deal later this year.
However, shares of Chevron rose post Q1 earnings results on April 26, as it reported adjusted EPS of $2.93, slightly beating estimates. Despite challenges like plummeting natural gas (NGM24) prices and lower refined product margins, robust U.S. upstream operations, driven by increased production volumes and strategic acquisitions, bolstered its overall performance, impressing investors.
For the current fiscal year, ending in December, Street expects CVX’s EPS to grow 3.4% year over year to $13.57. Chevron’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
The consensus rating among the 20 analysts covering CVX stock is a “Strong Buy.” That’s based on 14 “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.”
This configuration has been consistent over the past months.
Recently, Mizuho's Nitin Kumar raised their price target on Chevron by 2.5% from $200 to $205. The analyst maintained their “Strong Buy” rating on the stock.
Moreover, the mean price target of $183.09 suggests a 13.7% premium to CVX from current levels. The Street-high target of $206, assigned by Wells Fargo last month, represents an upside potential of 27.9%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
