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Yahoo
8 hours ago
- Business
- Yahoo
HSBC Downgrades Chevron (CVX) to Hold, Lowers PT
Chevron Corporation (NYSE:CVX) is one of the 10 Best Oil and Gas Stocks to Buy Now. On May 13, HSBC analysts downgraded Chevron Corporation (NYSE:CVX) from a 'Buy' to a 'Hold' rating and reduced the price target from $176 to $158. This decision came after the company announced it would reduce its share buyback program when it released its first-quarter earnings. A tanker truck making its way through a refinery facility. . Chevron Corporation's (NYSE:CVX) Chief Financial Officer, Eimear Bonner, said that the company's share repurchases for 2025 might be between $11.5 billion and $13 billion, which would be in the lower end of the company's guidance of $10 billion to $20 billion. HSBC analysts pointed out that Chevron Corporation (NYSE:CVX) no longer trades on par with its European competitors in terms of total distribution yield. This change came after the cut in buybacks. The analysts also noted that Chevron Corporation (NYSE:CVX) is currently trading at a 12-13% discount to Exxon based on expected 2025-26 price-to-cash flow ratios. HSBC analysts believe that this discount is fair given the higher risks associated with Chevron Corporation (NYSE:CVX). Chevron Corporation (NYSE:CVX) is one of the world's largest energy corporations. The company produces crude oil and natural gas. While we acknowledge the potential of CVX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 11 Stocks That Will Bounce Back According To Analysts and 11 Best Stocks Under $15 to Buy According to Hedge Funds. Disclosure: None.
Reuters
02-05-2025
- Business
- Reuters
Chevron meets Wall Street profit estimates as refining recovers from previous quarter
HOUSTON, May 2 (Reuters) - Chevron (CVX.N), opens new tab on Friday reported first-quarter earnings that met Wall Street estimates, as the company saw a turnaround in its refining business from a loss late last year. The company's chief financial officer, Eimear Bonner, said Chevron's share repurchases this year could be between $11.5 billion and $13 billion, which would be within its guidance of $10 billion to $20 billion. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. The second-largest U.S. oil producer posted adjusted earnings of $3.8 billion during the three months ended March 31, or $2.18 per share, matching analyst estimates, according to LSEG data. Refining and oil and gas production profits were down from a year ago, but the refining profit was a significant improvement from the previous quarter, when Chevron's downstream operations reported the first loss in four years. Chevron and other oil producers have been contending with falling crude prices since April 2, when U.S. President Donald Trump announced sweeping tariffs that are expected to reduce global economic growth. The lower crude prices have raised questions about whether producers will meet their goals for paying dividends and repurchasing shares - a cornerstone of Big Oil's strategy to woo investors - or cut capital expenditure budgets. Chevron said it paid $3 billion in dividends and repurchased $3.9 billion in shares during the quarter. In the second quarter, the company said it expects to repurchase between $2 billion and $3.5 billion in shares. If rolled forward, that would mean Chevron could land between $11.5 billion and $13 billion in repurchases for 2025, Bonner said in an interview. "We're still buying back a significant amount of our shares annually, on top of a dividend that's growing faster than our peers," she said. Chevron's global oil production totaled 3.35 million barrels of oil equivalent per day, flat from the same period last year. The company completed an expansion at the Tengiz oilfield in Kazakhstan in January and grew production from the Permian basin, the top U.S. oilfield, by 12% year-over-year. Those gains were offset by loss of production from asset sales. Chevron also started production at the Ballymore project in the U.S. Gulf of Mexico in April. Operations at Tengiz have been in focus as Kazakhstan has repeatedly exceeded OPEC+ oil production quotas. Bonner said the company is operating unrestricted. During the first quarter, Chevron was hit by a Trump administration order to wind down operations in Venezuela, which will impact the company's second-quarter shipments from the country. Earnings from oil and gas production were $3.76 billion, down from $5.24 billion in the year-ago quarter. Chevron's refining business earned $325 million, down from $783 million a year ago. But that represents a turnaround from the previous quarter when it reported a loss for the first time since 2020, as a post-pandemic surge in demand for fuel faded.
Yahoo
09-02-2025
- Business
- Yahoo
Looking for Passive Income? Why You Won't Want to Miss Chevron's 4.5%-Yielding Dividend.
Chevron (NYSE: CVX) has been a fantastic income stock over the years. The oil giant recently extended its dividend growth streak to 38 straight years. That's a rare feat, considering that only about 80 publicly traded companies in the U.S. have delivered 35 or more years of dividend increases. Chevron's track record is even more impressive because it operates in the volatile oil sector. The oil industry's volatility can scare off some income investors. However, Chevron has proven that it pays a durable dividend that can withstand the oil sector's wild swings. The company is in an excellent position to continue increasing its high-yielding dividend (a 4.5% current yield compared to 1.2% for the S&P 500) in the future. Because of that, income-seeking investors won't want to overlook Chevron's payout. Chevron operates a globally integrated energy business. It produces oil and gas (upstream), manages midstream energy infrastructure to transport, process, and store some of its production, and owns downstream chemicals and refining assets. This strategy helps Chevron maximize the value of its production and acts as a natural hedge against commodity price fluctuations (downstream businesses benefit from lower prices). As a result, Chevron produces steadier cash flow than peers focused solely on the upstream segment of the oil market. Last year, Chevron produced $31.5 billion in cash flow from operations. That was more than enough money to cover its capital spending ($16.4 billion), enabling it to produce about $15 billion in free cash flow. That excess cash easily covered the oil company's dividend outlay of $11.8 billion. Chevron returned all its remaining excess free cash flow -- and then some -- to shareholders by repurchasing $15.2 billion of its shares (retiring 5% of its outstanding shares). That brought its total cash returns to a record $27 billion last year. The company covered the deficit with its strong balance sheet and asset sales -- $7.7 billion from selling its Canadian assets and some non-core positions in the U.S. Even with those massive cash returns, Chevron maintained a strong balance sheet. "The balance sheet is in excellent health, with net debt below our historical levels," stated CFO Eimear Bonner on the company's fourth-quarter conference call. The oil giant ended the year with a net leverage ratio of 10%, well below its 20%-25% target range. Chevron's strong financial profile has allowed it to grow its dividend at a healthy pace. It increased its payout by 5% for 2025. "Over the past five years we have grown our dividend faster than the S&P 500 and nearly double the rate of our closest peer," said the CFO on the conference call. That above-average growth rate should continue. A big factor fueling that optimism is Chevron's expectations for free cash flow. CEO Michael Wirth said on the call: "Chevron is poised for industry-leading free cash flow growth. We expect to add $10 billion of annual free cash flow in 2026." One thing driving that outlook is the recent completion of its future growth project in Kazakhstan. The company expects to see a sustained increase in distributions from that investment in the future. "At $70 Brent [the global oil price benchmark], expected free cash flow to Chevron is $5 billion in 2025 and $6 billion in 2026," noted the CEO on the call. Chevron is also growing its production in the Gulf Coast region, "where we produce some of the highest margin barrels in our portfolio," said Wirth. The company recently completed its Anchor and Whale projects, which are ramping up, and expects to bring Ballymore online this year. Chevron is also growing its production in the Permian Basin. In addition, the company is working to reduce costs. It expects its capital spending to fall to a range of $14 billion to $16 billion in 2025. The company also aims to deliver $2 billion to $3 billion of structural cost reductions by the end of next year. There's lots of additional upside potential for Chevron's free cash flow from higher oil prices and its pending acquisition of Hess. The company believes it will win its arbitration case against Exxon, which would allow it to close that needle-moving deal in the third quarter. Buying Hess would make Chevron an even stronger oil company and further enhance its ability to grow its free cash flow in the coming years. Chevron has done a fantastic job paying dividends. It has proven the durability of its payout for nearly four decades. Meanwhile, it has delivered above-average dividend growth in recent years. That should continue, given the expected surge in the company's free cash flow. Because of that, Chevron's high-yielding payout is on a very sustainable foundation, making it an ideal option for investors seeking a lucrative passive income stream. Before you buy stock in Chevron, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chevron wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $788,619!* Now, it's worth noting Stock Advisor's total average return is 929% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list. Learn more » *Stock Advisor returns as of February 7, 2025 Matt DiLallo has positions in Chevron. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy. Looking for Passive Income? Why You Won't Want to Miss Chevron's 4.5%-Yielding Dividend. was originally published by The Motley Fool Sign in to access your portfolio
