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Chevron (CVX) Gains As Market Dips: What You Should Know

Zacks Equity Research

Chevron (CVX) closed the most recent trading day at $119.38, moving +0.95% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.01%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.19%.

Heading into today, shares of the oil company had lost 4.03% over the past month, lagging the Oils-Energy sector's gain of 0.57% and the S&P 500's gain of 3.61% in that time.

CVX will be looking to display strength as it nears its next earnings release. In that report, analysts expect CVX to post earnings of $1.89 per share. This would mark a year-over-year decline of 10.43%. Meanwhile, our latest consensus estimate is calling for revenue of $41.33 billion, down 6.04% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.70 per share and revenue of $157.55 billion, which would represent changes of -18.79% and -5.28%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for CVX. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.88% lower. CVX is currently a Zacks Rank #4 (Sell).

Looking at its valuation, CVX is holding a Forward P/E ratio of 17.66. This valuation marks a premium compared to its industry's average Forward P/E of 12.01.

Also, we should mention that CVX has a PEG ratio of 2.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CVX's industry had an average PEG ratio of 1.57 as of yesterday's close.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 193, which puts it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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