Oil stock Chevron (NYSE:CVX) just made one whopper of a purchase, picking up other oil stock Hess (NYSE:HES) for a hefty $53 billion price tag. A shareholder vote earlier today made the deal official, and Chevron shareholders were reasonably happy, sending shares up fractionally in Tuesday afternoon’s trading.
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Reports noted that Hess shareholders were clearly on the side of letting the deal go through, as a majority of outstanding common stock shares of Hess were voted in favor of doing just that. The combination, according to John Hess, Hess’ CEO, will ultimately make Hess part of a “…premier integrated energy company, with the leadership, asset portfolio, and financial resources to deliver significant shareholder value for years to come.”
Of course, the deal still faces government approval, which, given an increasingly activist Federal Trade Commission (FTC), may not be forthcoming. However, an approval for Exxon Mobil (NYSE:XOM) to buy Pioneer Natural Resources earlier this month does suggest a likely win for Hess-Chevron.
Increasing Resistance
However, even if the FTC goes along with the deal, Chevron still faces growing resistance in general. For instance, reports note that the activist event known as “Anti-Chevron Day” has ballooned and is now “Anti-Chevron Month.” Meanwhile, Richmond is reportedly planning an oil refinery tax on Chevron, the city’s largest employer, that would help fill a $34 million budget shortfall.
And just to top it all off, California is reportedly considering a slate of new regulations that, Chevron believes, would ultimately harm supply in the region and send prices up still further.
Is Chevron a Buy or Sell Today?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CVX stock based on 12 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After an 8.04% rally in its share price over the past year, the average CVX price target of $187.20 per share implies 17.77% upside potential.
