Chevron stock has wavered since reporting earnings on Friday, and analysts are split on what to do next.
The company is widely considered to be at the top of the pack of oil and gas names as far as the quality of its results and its future prospects. But Wall Street is conflicted on whether that is already reflected in the stock, making Chevron a less attractive investment today than some other oil and gas names.
Shares of Chevron (ticker: CVX) were up slightly on Monday, to $130.88, less than 5% below the all-time highs of $137 that they hit earlier this month.
Chevron missed analysts’ earnings estimates in the fourth quarter, though its free cash flow hit a record in 2021 and the company boosted its dividend. Shares fell 3.5% on Friday following the report.
Truist analyst Neal Dingmann downgraded Chevron to Hold from Buy on Monday, arguing that the stock looks relatively pricey compared with some of its smaller peers. He lowered his price target to $150 from $167.
“While Chevron shares could go higher on an absolute basis if commodity prices continue to climb, we forecast far more upside for a number of smaller caps such as Devon Energy (DVN), Occidental Petroleum (OXY) or EOG Resources (EOG) versus Chevron,” he wrote.
While Chevron’s oil production has produced strong results, Dingmann expects the company’s downstream results, like its refining and chemicals businesses, to post lower margins this year. And it has fewer favorable tax benefits than its peers coming in the years ahead, Dingmann calculated.
Morgan Stanley analyst Devin McDermott, however, wrote that Chevron’s selloff on Friday was overdone because the company’s shortfall was largely a result of one-time issues. His price target is $166.
Write to Avi Salzman at email@example.com