DBS analyst Suvro Sarkar maintained a Buy rating on Chevron (CVX – Research Report) on February 4 and set a price target of $174.00.
Suvro Sarkar’s Buy rating on Chevron’s stock is influenced by a comprehensive analysis of the company’s financial and operational strengths. Chevron’s earnings and cash flow performance are considered robust, supported by an efficient cost strategy, which is anticipated to persist into the future. The company’s strategic investments in decarbonization projects and renewable energy ventures, like the Bayou Bend Carbon Capture and Storage hub and the acquisition of Renewable Energy Group, are seen as forward-thinking moves aligning with the industry’s shift towards cleaner energy systems. Chevron’s upstream business segment, despite some concerns with delays in Kazakh operations, is expected to maintain its role as a significant contributor to earnings.
Furthermore, Chevron’s financial health is highlighted by a strong free cash flow profile and low gearing ratio compared to industry peers. The company’s commitment to returning value to shareholders through consistent dividends and share repurchases is underscored by its recent increase in the targeted annual share repurchase rate. Even with the anticipated short-term dilution from the Hess Corp acquisition, the overall financial strategy is designed to reward shareholders across various market cycles. The underperformance of Chevron’s share price compared to its peers over the past year is viewed as a point of entry for investors, with the current stock price reflecting a more favorable risk-reward scenario. Hence, Sarkar maintains a Buy rating with a target price of $174, based on peer comparisons and projected return on equity.
In another report released yesterday, Bernstein also reiterated a Buy rating on the stock with a $183.00 price target.
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Chevron (CVX) Company Description:
Chevron Corp. engages in the provision of administrative, financial management, and technology support for energy and chemical operations. It operates through the Upstream and Downstream segments. The Upstream segment consists of exploration, development, and production of crude oil and natural gas; liquefaction, transportation, and regasification associated with liquefied natural gas; transporting crude oil by major international oil export pipelines; processing, transporting, storage, and marketing of natural gas; and a gas-to-liquids plant. The Downstream segment comprises refining of crude oil into petroleum products; marketing of crude oil and refined products; transporting of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. The company was founded in 1906 and is headquartered in San Ramon, CA.
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