Chevron's Free Cash Flow Outlook Tops Estimates—Goldman Sachs Sees Upside

Goldman Sachs analyst Neil Mehta expressed views on the oil giant Chevron Corp‘s CVX fourth-quarter earnings reported today. Mehta is Buy-rated on CVX, with a price forecast of $182.

The company reported revenues and other income of $52.23 billion, beating the consensus of $46.75 billion. 

Adjusted net earnings were $3.63 billion, with adjusted EPS at $2.06 (down from $3.45 a year ago) in the quarter, missing the consensus of $2.11.

Also, the company increased its quarterly dividend by 5% to $1.71 per share.

Mehta states that the company’s fourth-quarter adjusted EPS was below the GS estimate of $2.11, while production volumes of 3,349 MBOE/d were largely in line with the GS estimates.

The analyst writes that the company’s guidance for over $10 billion in free cash flow growth by 2026 exceeds their forecast of $9 billion.

Mehta says that he expects the earnings call to focus on progress at TCO following the first oil production announcement, the production outlook in the Permian, updates on the Hess acquisition, and progress on cost reduction initiatives.

Investors can gain exposure to CVX via EA Series Trust Strive U.S. Energy ETF DRLL and SPDR Select Sector Fund – Energy Select Sector XLE.

Price Action: CVX shares are down 3.7% at $150.54 at the last check Friday.

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