Chevron (NYSE:CVX) is a part of TipRanks’ “Perfect 10” Smart Score list that has stocks with a higher potential to beat the benchmark index. For example, shares with a “Perfect 10” Smart Score have historically outperformed the S&P 500 Index (SPX) by a wide margin (refer to the graph below).
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CVX’s Entry into the “Perfect 10” Smart Score List Shouldn’t Surprise
The rebound in oil and NGL (natural gas liquids) prices has helped oil and gas companies like Chevron to deliver stellar sales and profitability. This, in turn, has helped CVX to strengthen its balance sheet, lower its debt, pay solid dividends, and buy back shares. All these measures supported its entry into the “Perfect 10” list.
For example, Chevron delivered record earnings of $29.11 billion in the first nine months of 2022. Further, in Q3, it paid dividends worth $2.7 billion (up 6% compared to the prior year), repurchased shares worth $3.75 billion, increased investments by over 50%, and reduced debt for the sixth consecutive quarter. Overall, in the first nine months of 2022, CVX has lowered its total debt by $7.73 billion.
Looking ahead, Cowen & Co. analyst Charles Rhyee, who recommends a Buy on CVX stock, expects the company to benefit from its capital allocation strategy, the strengthening of its balance sheet, and increased investments to drive Permian production.
What is the Price Target for CVX Stock?
Thanks to its solid financials, CVX stock has gained about 63.3% year-to-date and outperformed the benchmark index. Therefore, Wall Street analysts’ average price target of $181.62 implies 2.2% downside potential in Chevron stock.
Further, CVX stock has a Moderate Buy consensus rating on TipRanks based on seven Buys, five Holds, and one Sell recommendation.
Bottom Line
Chevron’s strong balance sheet, increased investments, growing energy supplies, and solid shareholder returns make it an attractive stock.
It has positive signals from hedge funds and investors. Hedge funds bought 2.9M CVX shares last quarter. Meanwhile, 1.1% of investors holding portfolios on TipRanks increased their exposure to Chevron stock.
Overall, CVX stock has an Outperform Smart Score of “Perfect 10” on TipRanks.
