Chevron stock received an upgrade Thursday, its second this week, even as Wall Street has broadly revised CVX stock prices lower after its third-quarter earnings miss and $53 billion acquisition of Hess. Meanwhile, U.K.-based supermajor Shell met third-quarter profit expectations early Thursday, allowing it to boost its share buyback program.
Bernstein analyst Bob Brackett on Thursday upgraded Chevron stock to outperform, from its previous market perform rating. However, Brackett lowered the firm's CVX target price to 182, down from 184. Bernstein sees Wall Street's reaction to Chevron's third-quarter earnings as "overdone."
Bank of America on Monday upgraded Chevron to a buy from a previous neutral rating with a CVX price target of 200, up from 190. Like Bernstein, Bank of America sees the drop in Chevron stock price since the Hess merger announcement as overdone.
Meanwhile, UBS, TD Cowen and Wells Fargo all cut Chevron stock price targets this week.
Chevron stock, a Dow Jones component, edged down 0.5% to 148.07 Friday during market action. On Thursday, CVX advanced around 3.3% to 148.75.
Shell Accelerates Buybacks
The London-based Shell met third-quarter earnings estimates but missed on revenue Thursday with results boosted by its liquefied natural gas (LNG) trading performance.
Shell Q3 earnings dropped 29% to $1.86 per share while sales fell 20% to $76.35 billion. The company added Thursday that it was accelerating its share buyback program to $3.5 billion in Q4, up from up from $2.7 billion. Shell is maintaining its quarterly dividend at $0.331 per share.
The company's as-expected Q3 earnings come just after U.S. energy giants CVX and Exxon Mobil reported worse-than-expected Q3 profit last week. U.K.-based BP on Tuesday also missed third-quarter EPS estimates.
Wall Street predicts Shell's full-year revenue will total $350.81 billion, down 8% vs. 2022, but beating out Exxon Mobil and Chevron, according to FactSet. However, both U.S. supermajors are expected to remain more profitable in 2023 than their London-based competitor.
AJ Bell investment director Russ Mould wrote Thursday that Shell's Q3 earnings meet could add to speculation of a potential Shell-BP merger.
"The divergence in fortunes with BP," Mould wrote Thursday. "Will only add fuel to the fire in terms of speculation around some kind of merger between the two companies."
Shell stock surged 4.8% to 68.56 Thursday. However, on Friday, SHEL dropped 2.5%.
Chevron Stock, Exxon Drop After Deals, Earnings
Since Exxon Mobil announced its $60 billion merger with Pioneer Natural Resources on Oct. 11, XOM shares have slipped around 1%. Meanwhile, Chevron stock has shed more than 10% since it reported its deal for Hess on Oct. 23.
The two energy giants fell Friday after both reported worse-than-expected third-quarter earnings, with quarterly profit declining more than 40% as results ran up against 2022 earnings comparisons boosted by oil prices forced higher by Russia's war on Ukraine.
Chevron stock ended last week down more than 13%. Exxon Mobil stock took a 5% loss for the week.
Meanwhile, Senate Majority Leader Chuck Schumer on Wednesday coaxed the U.S. Federal Trade Commission on to probe the recent multibillion dollar acquisitions by Exxon Mobil and Chevron for potential antitrust violations.
Chevron Chief Executive Mike Wirth during the Oct. 23 call on its Hess acquisition said CVX does not "see any antitrust concerns" in the U.S. or Guyana.
"We think this is good for the shareholders of both companies. It's also good for energy security," Wirth said. "We'll work closely with the antitrust authorities and satisfy their need for information, but really, don't see anything here."
Chevron stock has a 40 Composite Rating of 99. Shares has a 37 Relative Strength Rating and a 13 EPS Rating.
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