- J.P. Morgan analyst John M Royall upgraded Chevron Corp (NYSE:CVX) to Neutral from Underweight at an increased price target of $170 (from $161).
- The analyst is bullish on CVX’s highly defensive balance sheet, with below 5% net debt to capital and cash in hand of over $15B.
- Royall thinks the company’s solid financial position will aid in maintaining the capital program and continuing the share repurchase program of $10 billion-$20 billion at a trough level of $60/bbl or lower.
- Also Read: Oil Stocks Surge As Crude Prices Jump 3.4%; Energy Market Flashes Positive Signals
- CVX has less exposure to refining/chemicals business than its peers, so the analyst believes it is less exposed to challenging environments in downstream.
- Royall cites CVX’s valuation factors in expected production growth in low-single-digits driven by higher margin assets, including Permian and Tengiz.
- Given the Tengiz project is nearing completion, the analyst sees lesser risks related to significant project execution and expects shorter cycles and less complex projects, such as GoM tie-backs, to drive growth.
- The analyst expects revenues of adjusted EPS of $12.50 in 2023 and $13.50 in 2024.
- Also Read: Chevron To Acquire PDC Energy In $7.6B Deal
- Price Action: CVX shares are trading higher by 1.06% at $151.51 on the last check Wednesday.
- Photo via Wikimedia Commons
Is The ‘Memecoin Supercycle’ Over? Mad Crypto Alpha With Ivan
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