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

Zacks Equity Research
Is (STOR) Outperforming Other Finance Stocks This Year?

In the latest trading session, Chevron (CVX) closed at $113.27, marking a +1.34% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.48%. Elsewhere, the Dow gained 0.53%, while the tech-heavy Nasdaq added 0.8%.

Prior to today's trading, shares of the oil company had lost 3.2% over the past month. This has lagged the Oils-Energy sector's loss of 1.26% and the S&P 500's loss of 2.09% in that time.

Wall Street will be looking for positivity from CVX as it approaches its next earnings report date. This is expected to be February 1, 2019. In that report, analysts expect CVX to post earnings of $1.99 per share. This would mark year-over-year growth of 172.6%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $41.68 billion, up 10.8% from the year-ago period.

Any recent changes to analyst estimates for CVX should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 18.39% lower. CVX is currently a Zacks Rank #5 (Strong Sell).

Digging into valuation, CVX currently has a Forward P/E ratio of 14.56. This represents a premium compared to its industry's average Forward P/E of 9.89.

We can also see that CVX currently has a PEG ratio of 2.08. 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. The Oil and Gas - Integrated - International industry currently had an average PEG ratio of 1.07 as of yesterday's close.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 248, putting it in the bottom 4% 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.

To follow CVX in the coming trading sessions, be sure to utilize Zacks.com.


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