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Analyzing Chevron’s Stock Price Forecast after Its Q4 Earnings

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Implied volatility

In the previous part, we discussed analysts’ ratings for Chevron (CVX). In this part, we’ll discuss the changes in Chevron’s implied volatility. We’ll also estimate Chevron’s stock price range for the seven days ending February 8.

Chevron reported its fourth-quarter earnings on February 1. The implied volatility in Chevron fell by 5.6 percentage points to 17.4% compared to the previous day. The implied volatility was lower than its 30-day average implied volatility at 25.6%. On February 1, Chevron’s stock price rose 3.2%. Chevron’s implied volatility and its stock price moved inversely.

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Expected price range

Considering Chevron’s implied volatility of 17.4% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), Chevron’s stock price could close between $121.2 and $115.5 per share in the seven days ending February 8.

Peers’ implied volatility

The implied volatility in PetroChina (PTR) fell by 4.4 percentage points compared to the previous day to 27.9% on February 1. The implied volatility in Petrobras (PBR) and YPF (YPF) decreased by 1.4 percentage points and 0.7 percentage points, respectively, to 39.7% and 34.2%, respectively, on February 1.

If we consider these companies’ stock prices on February 1, then PetroChina, Petrobras, and YPF rose 0.6%, 0.8%, and 0.9%, respectively.

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