Among analysts’ ratings for each company, 32%, 78%, 82%, and 55% of the analysts rated ExxonMobil, Chevron, Shell, and BP as a “buy,” respectively.
Shell’s has the most “buy” ratings
Shell’s mean target price is $78 per share, which implies an ~23% gain from the current level. Shell has the highest implied gains among the peers discussed in this series.
Shell’s financial health was stronger in 2018. Shell increased its earnings, reduced its net debt, and enhanced its liquidity. Shell’s net debt decreased by $14.5 billion to $51.4 billion in 2018. The company’s cash flow from operations rose 49% to $53.0 billion in 2018. The improvement is expected to continue in 2019. Going forward, most analysts will likely remain positive on the stock due to its strengthening financials.
Chevron has higher “buy” ratings
Chevron has more “buy” ratings than BP and ExxonMobil. Chevron’s mean target price is $139 per share, which implies an ~16% gain from the current level. After the earnings, JPMorgan Chase raised its target price on the stock from $138 to $140.
In 2018, Chevron’s earnings rose due to strong upstream earnings and volumes. The company achieved record volumes, which grew 7% in 2018. Chevron’s cash flow from operations rose to highs of $30.6 billion in 2018. Due to healthy cash flows, Chevron could pay higher dividends, fund its optimal capital program, strengthen its balance sheet, and return surplus cash to shareholders in the form of share repurchases. The company expects the momentum to continue in 2019.