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

Zacks Equity Research

Chevron (CVX) closed at $116.18 in the latest trading session, marking a +0.03% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.14%. Meanwhile, the Dow lost 0.11%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Coming into today, shares of the oil company had lost 4.34% in the past month. In that same time, the Oils-Energy sector lost 1.67%, while the S&P 500 lost 0.91%.

Investors will be hoping for strength from CVX as it approaches its next earnings release, which is expected to be November 1, 2019. On that day, CVX is projected to report earnings of $1.85 per share, which would represent a year-over-year decline of 12.32%. Our most recent consensus estimate is calling for quarterly revenue of $40.77 billion, down 7.31% from the year-ago period.

CVX's full-year Zacks Consensus Estimates are calling for earnings of $6.75 per share and revenue of $156.56 billion. These results would represent year-over-year changes of -18.18% and -5.88%, respectively.

Investors should also note any recent changes to analyst estimates for CVX. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 1.37% lower. CVX is currently a Zacks Rank #3 (Hold).

In terms of valuation, CVX is currently trading at a Forward P/E ratio of 17.21. This valuation marks a premium compared to its industry's average Forward P/E of 12.31.

We can also see that CVX currently has a PEG ratio of 4.3. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Integrated - International stocks are, on average, holding a PEG ratio of 1.69 based on yesterday's closing prices.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 230, putting it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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