Chevron Corporation (NYSE: CVX), a petroleum products manufacturing and selling company, has seen almost flat year-to-date performance with its stock price hovering around $154. In comparison, its peer Exxon Mobil (NYSE: XOM) has seen a 12% increase in its stock price this year. Chevron’s relatively poor stock performance is likely due to investor concerns surrounding the pending $53 billion acquisition of Hess. This acquisition could provide strategic benefits to Chevron by adding significant oil-equivalent production to its portfolio, but there is uncertainty due to Exxon’s potential involvement in the deal.
Despite the uncertainties surrounding the acquisition, Brent crude oil prices are currently at $85 per barrel, which could support Chevron’s longer-term gains. The company’s strong balance sheet and diversified revenue streams from midstream and downstream operations position it well for potential gains even if oil prices decrease. However, Chevron has experienced inconsistent stock performance, with strong gains in previous years but underperforming the S&P 500 in 2023.
Beating the S&P 500 index consistently has been challenging for individual stocks in recent years, including other energy sector heavyweights and technology giants. In contrast, the Trefis High Quality Portfolio has outperformed the S&P 500 each year, indicating better returns with less risk. With high oil prices and elevated interest rates in the current macroeconomic environment, there are uncertainties about Chevron’s performance in the coming year.
Chevron reported solid first-quarter earnings, driven by its U.S. upstream business. While net income declined compared to the year-earlier quarter, the company’s U.S. production increased significantly, partly due to acquisitions and strong operational performance. Chevron plans to ramp up production from the Permian Basin, signaling potential growth in U.S. oil output. However, international production declined, and natural gas realizations saw significant decreases.
Looking ahead, Trefis forecasts Chevron’s revenues to be around $200 billion for fiscal year 2024, with an expected EPS of $12.75. Based on these projections, Trefis values Chevron at $173 per share, reflecting a 12% potential upside from the current market price. This valuation is based on core sales revenue figures that exclude revenue from distribution and marketing activities. It is essential to consider how Chevron’s performance compares to its peers to assess its competitiveness in the industry.
Investors looking for market-beating portfolios can consider Trefis’s analysis and price estimates to make informed investment decisions. The comparison with peers and industry metrics can provide valuable insights into Chevron’s position in the market and its potential for future growth.
