Houston, Texas-based Chevron Corporation (CVX) integrates energy and chemicals operations. Valued at $275.8 billion by market cap, the company explores, develops, produces, and transports crude oil and natural gas, as well as refines, markets, and distributes fuels worldwide via pipelines, ships, and rail.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and CVX definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the integrated oil & gas industry. CVX’s focus on disciplined capital allocation, investments in renewable energy, carbon capture, and emerging technologies demonstrate its commitment to a lower-carbon future. Its diverse energy portfolio, operational efficiency, and expertise in deepwater exploration, LNG, and carbon management have enhanced its competitive edge in the industry.
Despite its notable strength, CVX slipped 6.2% from its 52-week high of $167.11, achieved on Apr. 29, 2024. Over the past three months, CVX stock dipped 3.4%, underperforming the Dow Jones Industrials Average’s ($DOWI) 3.3% losses during the same time frame.
In the longer term, shares of CVX rose 8.2% on a YTD basis, outperforming DOWI’s YTD gains of 1.6%. However, the stock climbed 3% over the past 52 weeks, underperforming DOWI’s 11% returns over the last year.
To confirm the bullish trend, CVX has been trading above its 50-day and 200-day moving averages since early February.
CVX’s underperformance stems from fluctuating demand, weak crude oil prices, cost pressures, and regulatory restrictions on drilling. An ongoing arbitration dispute with Exxon Mobil Corporation (XOM) over the potential merger with Hess Corporation’s (HES) Guyana project threatens to delay the deal, impacting its growth prospects. Chevron has struggled with losses due to lower refined product margins and rising operating costs, particularly in its West Coast refining operations, further weakening its overall profitability. Moreover, Trump announced the U.S. will revoke Chevron's license to operate in Venezuela implying the company’s decline.
On Jan. 31, CVX shares closed down more than 4% after reporting its Q4 results. Its revenue of $52.2 billion beat analyst estimates of $47 billion. The company’s adjusted EPS was $2.06, missing analyst estimates of $2.19.
CVX’s rival, Exxon Mobil Corporation (XOM) shares lagged behind the stock, with a 2.4% gain on a YTD basis, but has taken the lead over the stock with 5.9% returns over the past 52 weeks.
Wall Street analysts are bullish on CVX’s prospects. The stock has a consensus “Strong Buy” rating from the 22 analysts covering it, and the mean price target of $176.91 suggests a potential upside of 12.9% from current price levels.
