Black Gold Bonanza: Analyst Bets On Chevron, Citing Price Outlook

Scotiabank analyst Paul Y. Cheng upgraded Chevron Corporation CVX to Sector Outperform from Sector Perform and increased the price target to $195 (from $170).

The analyst says that Chevron has the highest oil torque among the integrated super majors, and can enjoy macro tailwinds over the next few years. 

Also, the analyst remains optimistic that Chevron will prevail in the arbitration against Exxon Mobil Corporation XOM and CNOOC in Guyana, which could serve as an attractive entry point.

The oil and gas production in Guyana reportedly hit construction delays and has threatened to curtail the rising oil hotspot's revenue by about $1 billion this year.

The analyst raised FY24 adjusted EPS outlook to $12.70 from $10.90.

Moreover, the analyst’s bullish stance also reflects an increase in the near- and long-term oil price outlook by Scotia.

In particular, the analyst assumes a higher long-term oil price deck of $75/bbl Brent vs. their previous expectation of $65/bbl in 2024.

Investors can gain exposure to the stock via SPDR Select Sector Fund – Energy Select Sector XLE and IShares U.S. Energy ETF IYE.

Now Read: Chevron Exits Myanmar’s Yadana Gas Field

Price Action: CVX shares are down 0.52% at $161.83 on the last check Thursday.

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