Chevron
Over the past 12 months, shares of Chevron Corp. (NYSE: CVX) have risen by 6.2%. Since peaking at around $190 a share in November, the price has dropped by about 12%. That decline is down to a crude oil price drop of around 16% over the same period. The U.S. Energy Information Administration expects the spot price for Brent crude to decrease by about $15 year over year in 2023 to around $85. West Texas Intermediate typically trades at a discount of $4 to $5 a barrel to Brent. Cheaper crude will help raise refining margins but will not offset the lower crude price completely.
Analysts’ sentiment remains slightly bullish on the stock. Of the 28 brokerages covering Chevron, 13 have a Buy or Strong Buy rating and 14 have Hold ratings. At a recent price of around $167.00 a share, the upside potential based on a median price target of $192.00 is 15%. At the high price target of $236.00, the upside potential is 41.3%.
First-quarter revenue is forecast at $49.49 billion, which would be down 12.4% sequentially and 9.0% lower year over year. Adjusted EPS are forecast at $3.41, down 16.7% sequentially but up 1.5% year over year. For the full 2023 year, analysts expect Chevron to post EPS of $14.35, down 23.8%, on revenue of $203.14 billion, down 17.5%.
Chevron stock trades at 11.6 times expected 2023 EPS, 11.3 times estimated 2024 earnings of $14.71 and 11.6 times estimated 2025 earnings of $14.32 per share. The stock’s 52-week trading range is $132.54 to $189.68. Chevron pays an annual dividend of $6.04 (yield of 3.52%). Total shareholder return for the past 12 months was 9.48%.
Exxon Mobil
Shares of Exxon Mobil Corp. (NYSE: XOM) have risen by nearly 40% over the past 12 months. The shares have added about 11% in just the past month. On Monday, the U.S. Supreme Court declined to review an appeal by Exxon, Chevron and Suncor to move several climate-related lawsuits from state to federal courts. The two U.S. oil giants should benefit from lower crude prices because it lowers their depreciation and depletion of reserves, keeping the companies’ costs for access to capital in check.
Of 28 analysts covering the stock, 12 rate the shares at Hold, seven have a Strong Buy rating and eight rate the shares at Buy. At a price of around $115.00 a share, the upside potential based on a median price target of $123.75 is 7.6%. At the high target of $148.00, the upside potential is 28.7%.
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