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Chevron (CVX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Chevron (CVX) closed at $116.61 in the latest trading session, marking a +1.63% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.69%. Elsewhere, the Dow gained 0.22%, while the tech-heavy Nasdaq added 0.91%.

Coming into today, shares of the oil company had lost 7.21% in the past month. In that same time, the Oils-Energy sector lost 4.48%, while the S&P 500 lost 0.61%.

CVX will be looking to display strength as it nears its next earnings release, which is expected to be November 1, 2019. On that day, CVX is projected to report earnings of $1.51 per share, which would represent a year-over-year decline of 28.44%. Our most recent consensus estimate is calling for quarterly revenue of $39.38 billion, down 10.47% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.16 per share and revenue of $153.53 billion. These totals would mark changes of -25.33% and -7.7%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for CVX. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. Over the past month, the Zacks Consensus EPS estimate has moved 2.54% lower. CVX is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, CVX is currently trading at a Forward P/E ratio of 18.63. This valuation marks a premium compared to its industry's average Forward P/E of 12.96.

We can also see that CVX currently has a PEG ratio of 4.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Integrated - International was holding an average PEG ratio of 1.74 at yesterday's closing price.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 222, which puts it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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