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What Analysts Recommend for CVX after 2Q17 Earnings



Analyst ratings for CVX

In this series, we’ve examined Chevron’s (CVX) 2Q17 earnings versus estimates. Plus, we analyzed Chevron’s segmental earnings in 2Q17. We also discussed CVX’s stock performance after its earnings release on July 28, 2017. Now, we’ll examine analyst ratings for CVX post earnings.

Out of 26 analysts currently covering Chevron, 17 have assigned “buy” or “strong buy” ratings, seven have assigned “hold” ratings, and two have assigned “sell” or “strong sell” ratings on the stock.

Chevron could see a change in ratings in the days to come as analysts further analyze 2Q17 numbers. Chevron’s mean target price stands at $116 per share, which implies an 8% gain from the current level.

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Why higher “buy” ratings?

Chevron (CVX) has embraced the strategy of reducing capex, exiting non-core assets, and cutting costs. Plus, Chevron’s capital-intensive projects that required massive outlays, like Gorgon and Wheatstone, have started or are in the process of starting production. With the growth projects becoming operational, Chevron is ready to benefit from any increase in oil prices. Plus, Chevron has a favorable leverage position that offers the company financial strength and flexibility.

Going forward, with CVX’s strategy in place and new projects yielding results in the context of increasing oil prices, Chevron (CVX) is likely to witness steep growth in earnings.

How analysts rate peers

BP (BP), ExxonMobil (XOM), and Royal Dutch Shell (RDS.A) have been rated as a “buy” by 37%, 31%, and 91% of analysts, respectively. Also, other global players like Statoil (STO), Petrobras (PBR), and YPF (YPF) have been rated as “buy” by 40%, 47%, and 77% of analysts, respectively.

In the next part, we’ll look at the change in Chevron’s implied volatility on its earnings release day. We’ll also estimate Chevron’s stock price range for the next seven days post earnings.


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