Chevron's Defenses Stand Strong Amidst Volatile Market Dynamics: JP Morgan Analyst

J.P. Morgan analyst John M Royall upgraded Chevron Corp CVX to Neutral from Underweight at an increased price target of $170 (from $161).
The analyst is bullish on CVX's highly defensive balance sheet, with below 5% net debt to capital and cash in hand of over $15B.
Royall thinks the company's solid financial position will aid in maintaining the capital program and continuing the share repurchase program of $10 billion-$20 billion at a trough level of $60/bbl or lower.
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CVX has less exposure to refining/chemicals business than its peers, so the analyst believes it is less exposed to challenging environments in downstream.
Royall cites CVX's valuation factors in expected production growth in low-single-digits driven by higher margin assets, including Permian and Tengiz.
Given the Tengiz project is nearing completion, the analyst sees lesser risks related to significant project execution and expects shorter cycles and less complex projects, such as GoM tie-backs, to drive growth.
The analyst expects revenues of adjusted EPS of $12.50 in 2023 and $13.50 in 2024.
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Price Action: CVX shares are trading higher by 1.06% at $151.51 on the last check Wednesday.
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