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Analysts’ Estimates: Will XOM or CVX Post the Most Gains?

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May. 6 2019, Published 2:33 p.m. ET

Analysts’ ratings for XOM and CVX

In this article, we’ll review Wall Street analysts’ opinions on ExxonMobil (XOM) and Chevron (CVX) after their first-quarter earnings results.

XOM and CVX are covered by 22 and 19 Wall Street analysts, respectively. Of these, 27% of analysts have rated XOM as a “buy,” and 74% of analysts have rated Chevron as a “buy.”

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Most analysts are positive on Chevron

In the first quarter, Chevron continued to improve its financials and return wealth to shareholders. The company paid $2.2 billion in dividends and repaid $1.6 billion in debt. Chevron’s total capital and exploratory spending stood at $4.7 billion in the first quarter of 2019. Most of Chevron’s capex went toward its promising Upstream segment, whose volumes grew 7% YoY to 3.04 million barrels of oil equivalent per day in the quarter.

Recently, Chevron also agreed to acquire Anadarko Petroleum in a cash and equity deal. The deal is expected to boost Chevron’s Upstream volumes. Anadarko’s first-quarter Upstream volumes stood at 0.7 MMboepd (million barrels of oil equivalent per day). For more on the acquisition, read A Surprise Megadeal: Chevron to Acquire Anadarko.

It should be no surprise that with Chevron’s strengthening financials and expanding Upstream portfolio, most analysts hold favorable opinions on its stock. Chevron’s mean target price of $141 implies a potential upside of 20% from its current level.

ExxonMobil’s mixed ratings

In the first quarter, ExxonMobil’s earnings fell and missed estimates, which was in line with the performances of peers who’d faced weaker financials in the quarter. However, ExxonMobil continued to solidify its Upstream portfolio in the quarter. The company’s key positions offshore Guyana and in the Permian regions continued to strengthen. Thus, overall, the company advanced significantly upon its long-term growth path.

But ExxonMobil stock has continued to trade at a premium to its peer averages. Likely due to its premium valuations, many Wall Street analysts have assigned “hold” or “sell” ratings to the stock. ExxonMobil’s mean target price of $85 implies a potential upside of 10% from its current level.

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