Short Report on Chevron Stock

Chevron logged a -0.4% change during today's afternoon session, and is now trading at a price of $156.04 per share.

Chevron returned losses of -10.0% last year, with its stock price reaching a high of $189.68 and a low of $149.74. Over the same period, the stock underperformed the S&P 500 index by -20.0%. As of April 2023, the company's 50-day average price was $164.28. Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. Based in San Ramon, CA, the large-cap Energy company has 43,846 full time employees. Chevron has offered a 3.7% dividend yield over the last 12 months.

Growing Revenues With a Flat Capital Expenditure Trend:

2018 2019 2020 2021 2022 2023
Revenue (MM) $166,339 $146,516 $94,692 $162,465 $246,252 $222,806
Gross Margins 12% 4% -8% 13% 20% 19%
Operating Margins 12.0% 4.0% -8.0% 13.0% 20.0% 19.0%
Net Margins 9.0% 2.0% 0.0% 10.0% 14.0% 14.0%
Net Income (MM) $14,860 $2,924 -$18 $15,689 $35,608 $30,229
Net Interest Expense (MM) $748 $798 $697 $712 $516 $486
Depreciation & Amort. (MM) $19,419 $29,218 $19,508 $17,925 $16,319 $16,012
Earnings Per Share $7.74 $1.54 -$2.96 $8.14 $18.28 $15.77
EPS Growth n/a -80.1% -292.21% 375.0% 124.57% -13.73%
Diluted Shares (MM) 1,914 1,895 1,870 1,920 1,940 1,815
Free Cash Flow (MM) $16,826 $13,198 $1,655 $21,131 $37,628 $27,642
Capital Expenditures (MM) $13,792 $14,116 $8,922 $8,056 $11,974 $13,625
Net Current Assets (MM) -$64,200 -$63,891 -$80,986 -$65,857 -$47,124 -$49,691
Long Term Debt (MM) $40,823 $37,246 $55,529 $46,879 $37,687 $41,773
Net Debt / EBITDA 0.9 0.97 4.19 1.03 0.31 0.58

Chevron has growing revenues and a flat capital expenditure trend, low leverage, and a strong EPS growth trend. However, the firm suffers from slimmer gross margins than its peers and weak operating margins with a positive growth rate. Finally, we note that Chevron has irregular cash flows.

Chevron's Valuation Is in Line With Its Sector Averages:

Chevron has a trailing twelve month P/E ratio of 10.4, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of $13.97, the company has a forward P/E ratio of 11.8. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 12.6%. On this basis, Chevron's PEG ratio is 0.83. Using instead the 9.1% weighted average of Chevron's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 1.14, which shows that its shares might be fairly priced. The market is placing a fair value on Chevron's equity, since its P/B ratio of 1.84 is comparable to its sector average of 1.68. The company's shares are currently trading -11.5% below their Graham number. In conclusion, Chevron's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.

Analysts Give Chevron an Average Rating of Buy:

The 26 analysts following Chevron have set target prices ranging from $160.33 to $202.77 per share, for an average of $178.17 with a buy rating. As of April 2023, the company is trading -7.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Chevron has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 72.6% of the company's shares, and the insider ownership rate stands at 0.04%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $25,195,199,587.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.