The oil major Chevron is the IBD Stock Of The Day. CVX stock has soared following Russia's invasion of Ukraine as oil prices climbed to $130 per barrel earlier this week.
The U.S. and its allies have implemented far-reaching economic sanctions against Russia ranging from banking to consumer goods. And the Biden administration is taking it a step further.
On Tuesday, the White House announced a U.S. ban on imports of Russian oil. Oil and gas make up a massive part of Russia's export and help fund its government. While European allies, who are highly dependent on Russian natural gas, are unlikely to join in, oil majors have made their own decision to pull back from exposure in Russia.
BP, Shell and Exxon Mobil are exiting their Russian operations and pulling out of future projects amid the conflict.
Chevron is especially well-positioned to take advance of higher oil prices. The company is "relatively less exposed than others in our industry" to the crisis in Ukraine, CEO Mike Wirth said at Chevron's investors day earlier this month.
Chevron also has a fair amount of exposure to liquefied natural gas. LNG stocks have come into focus as Europe remains highly dependent on Russian natural gas and is looking for alternatives.
Chevron Stock Outperforms Peers
Shares rose 2.7% to 170.82 on the stock market today, after hitting a fresh high of 174.76 intraday. Shares closed higher even as crude oil prices reversed lower from strong morning gains. CVX stock only gave up 2.5% on Wednesday even as crude oil prices plunged 12%.
Since Russia's invasion on Feb. 23, CVX stock has run up 25% after pulling back to its 10-week moving average. That followed a breakout from a cup base with a 113.21 buy point. Chevron stock initially cleared that base in October but didn't definitively move higher until the very end of 2021.
CVX stock is soaring past peers, crushing gains by Energy Select Sector SPDR ETF. That comes even as Chevron is a huge weight in the exchange traded fund. Exxon stock rose 3.1% to 85.36 Thursday.
The relative strength line, which tracks performance vs. the S&P 500 index, is rising even faster than CVX stock.
Chevron stock is advancing in a way that it hasn't in decades. It's greatly extended from its 50-day/10-week lines.
At this point, investors should consider taking at least partial profits. They could choose to sell the rest if CVX stock breaks through its 10-day or 21-day line.
Could Chevron stock continue to rise? Absolutely. If crude oil, LNG and gasoline prices keep rising amid the Russia-Ukraine crisis, energy stocks will have a strong tailwind. But there's also a risk that crude oil prices will tumble back, slamming the energy sector
CVX Stock Fundamentals
Chevron has a perfect Composite Rating of 99. But its EPS Rating is weaker, at 71, as demand rose and fell unexpectedly during the Covid-19 pandemic. The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity, and relative price performance. Investors should generally focus on stocks with a Composite Rating of 90 or higher.
In late January, the oil major reported Q4 EPS of $2.56 as revenue jumped to $48.31 billion. But FactSet analysts expected a profit of $3.14 per share on revenue of $45.34 billion.
Chevron is the top-ranked stock in IBD's Oil & Gas-Integrated group, which also includes Exxon. Chevron is the only oil major on the DJIA after Exxon was booted last year.
Follow Gillian Rich on Twitter at @GillianRich_ for energy news and more.
