Chevron’s 4Q Sales Miss Analysts’ Estimates; Shares Drop 4%

Chevron Corporation reported weaker-than-expected results for the fourth quarter. In response, the energy giant’s shares closed 4.3% lower on Friday.

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Chevron (CVX) posted an adjusted loss of $0.01 per share in 4Q, compared to analysts’ expectations of earnings per share of $0.08 and year-ago earnings of $1.49 per share. The company’s revenues of $25.3 billion missed the Street estimates of $26.2 billion and declined 30.5% year-over-year.

Chevron added 832 million barrels of net oil-equivalent proved reserves in 2020, which mainly came from the acquisition of Noble Energy and from assets in Kazakhstan. Chevron said, “These additions, which are subject to final reviews, are net of reductions associated with lower commodity prices, decisions to reduce capital funding for various projects and asset sales.”

Chevron’s CEO Mike Wirth noted, “2020 was a year like no other.” He added, “When market conditions deteriorated, we swiftly reduced capital spending by 35 percent from 2019 and also reduced operating costs, demonstrating our commitment to capital and cost discipline.” (See Chevron stock analysis on TipRanks)

Following the results, Raymond James analyst Justin Jenkins maintained a Buy rating and a price target of $112 (25.8% upside potential) on the stock, “based on a more secure balance sheet, solid leverage to a macro/oil price recovery and capital allocation that is already aligned with investor preferences.”

In a note to investors, Jenkins wrote, “Efficiency drivers are set to improve profitability into 2021, while a ‘block and tackle’ capital program over the next few years should further improve competitiveness, even without more help from the macro environment.”

Meanwhile, the rest of the Street has a cautiously optimistic outlook, with a Moderate Buy consensus rating based on 10 Buys and 4 Holds. The average analyst price target of $104.15 implies upside potential of about 22.2% to current levels. Shares were down about 19% in the previous year.

Furthermore, TipRanks’ data shows that financial bloggers have a bullish call on the stock.