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Oil stocks fell sharply last week as WTI crude oil dropped to within a buck of its lowest weekly settle since late 2021. Benchmark oil remains trending lower after peaking above $120 in the middle of
Chevron: Oil Prices Break Below $70, But CVX Remains Undervalued
Summary
- I maintain a buy rating on Chevron (CVX) due to its modest earnings multiple, solid free cash flow, and healthy share repurchases.
- Chevron's Q3 results were strong, with EPS and revenue beating forecasts, despite a YoY profit dip from lower margins and fewer tax assets.
- Management forecasts $2-$3 billion in cost reductions through 2026, with increased share repurchases and a $2 billion drop in organic capex next year.
- Despite a weak technical chart, Chevron's high yield, ongoing buybacks, and solid Q3 results present more positives than negatives for investors.
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