Chevron’s Q2 Results Beat Analysts’ Expectations

Chevron Corporation (CVX) posted impressive Q2 results, driven by improved market conditions, transformation benefits, and merger synergies. The integrated energy company produces crude oil and natural gas, along with manufacturing transportation fuels, lubricants, petrochemicals, and additives.

The company reported Q2 adjusted earnings of $1.71 per share, compared to the adjusted loss of $1.56 per share reported in the same quarter last year. That also beat analysts’ expectations of earnings of $1.50 per share.

Additionally, total revenues more than doubled on a year-over-year basis to $37.6 billion, outpacing consensus estimates of $34.32 billion.

Quarterly results were supported by the reduction in capital and exploration expenditures, which decreased 15.2% year-over-year to $2.8 billion. Additionally, global net oil-equivalent production was 3.13 million barrels per day in the quarter, up 5%. (See Chevron stock charts on TipRanks)

Speaking about the earnings release, Chevron CEO Mike Wirth said, “Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending. We will resume share repurchases in the third quarter at an expected rate of $2-3 billion per year.”

Recently, Piper Sandler analyst Ryan Todd maintained a Buy rating and lifted the stock’s price target to $137 (34.6% upside potential) from $126.

Todd commented that crude oil “tightness” provides further momentum to the “robust” outlook of free cash flow for integrated oils.

According to the analyst, upstream valuations remain “severely discounted.” He believes that 14% free cash flow yields, improving shareholder distributions, and crude balances as of the second half of 2021 show “upwards risk to the forward oil curve.”

Consensus among analysts is a Strong Buy based on 7 Buys versus 2 Holds. The average Chevron price target of $129.75 implies 27.4% upside potential from current levels. Shares have gained 26.9% over the past year.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Chevron, with 8.4% of portfolios tracked by TipRanks increasing their exposure to CVX stock over the past 30 days.