Argus downgrades Chevron on valuation, prefers Exxon

Chevron (CVX -0.7%) is downgraded to Hold from Buy at Argus following its 16% run-up in total return during the past three months, seeing few positive catalysts in the near term and not expecting CVX's promising new projects to contribute meaningfully to production until Q4

Argus prefers Exxon Mobil (XOM -0.6%) among this duo, maintaining its Buy rating and raising its price target to $114 from $104 as it contrasts XOM’s plan to curtail capital spending in the coming years with CVX, which continues to spend heavily on new projects; as a result, XOM should enjoy a boost in free cash flow going forward while CVX has struggled to generate free cash flow.

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Comments (6)
    , contributor
    Comments (5156) | Send Message
    Imo, Big mistake.


    CVX trades at 8-12% discount from its peer average on forward valuation.


    CVX is also far more shareholder friendly than XOM.


    Imo this was a "short term" call by Argus , and these stocks are long term investment vehicles.
    8 May 2014, 05:19 PM Reply Like
  • T-Rex81
    , contributor
    Comments (35) | Send Message
    It all about the mix and Chevron doesn't have it. The next two decade are going to be all about nat gas and cvx just doesn't have it. Buffet see's it and others are starting to come around. Our company is switching it's fleet to Fords new F-250 that runs on nat gas for 200 miles before switching to gasoline. We expect this switch to save us over a million a year in fuel costs. This technology is going to sweep the nation once people realize they can fill up @ around 1.85 a gallon of energy and just have gasoline as a backup. Power plants, CNG transportation and LNG exports. Plus oil. Good call Argus.
    8 May 2014, 11:44 PM Reply Like
    , contributor
    Comments (116) | Send Message
    I'll stick with my CVX and pass on XOM. I do like the natural gas play and own two. GEL & EPD.
    9 May 2014, 08:05 AM Reply Like
  • Skippy09
    , contributor
    Comments (1923) | Send Message
 could sell your CVX, GEL & EDP and just buy XOM.
    9 May 2014, 11:56 PM Reply Like
  • User 353732
    , contributor
    Comments (5160) | Send Message
    Why choose if one doesn't have to? Most retail investors who like XOM also hold CVX and COP as core equities.
    10 May 2014, 03:18 PM Reply Like
  • Goodplan
    , contributor
    Comments (20) | Send Message
    I already owned CVX. This article Made me buy XOM instead of more CVX. I like the idea of owning both.
    26 May 2014, 02:37 PM Reply Like
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