RBC upgrades Chevron, says oil large can navigate a risky market because of a ‘fortress steadiness sheet’
RBC Capital Markets thinks oil large Chevron can thrive in an more and more unstable macroeconomic atmosphere. The financial institution upgraded Chevron inventory to outperform from sector carry out on Thursday. It additionally raised its worth goal to $180 worth goal from $165, implying upside of 19.5% from Wednesday’s shut. RBC analyst Biraj Borkhataria thinks Chevron’s has managed its steadiness sheet conservatively up to now, which has helped the corporate maintain its dividend yield in addition to purchase firms efficiently. On Could 22 , it agreed to purchase PDC Power . These elements underpin Chevron’s skill to surpass friends in a difficult market. CVX YTD mountain Chevron inventory has pulled again greater than 16% from the beginning of 2023. “Trying ahead, we imagine the macro atmosphere is prone to stay risky, nonetheless weaker finish product demand and OPEC+ managing the oil market leaves CVX’s upstream heavy weighting well-placed,” Borkhataria mentioned. “This mixed with its fortress steadiness sheet and dedication to remaining disciplined by means of natural and inorganic exercise ought to show defensive over time.” Chevron shares have struggled this yr, shedding greater than 16%. Nonetheless, Chevron’s self-discipline relating to mergers and acquisitions provides RBC extra confidence that the corporate is not solely shopping for firm’s out of necessity and is as a substitute making prudent strikes. “In our view, the corporate’s skill to execute on this entrance has been spectacular, and importantly, it’s each about what the corporate has carried out, and what it has chosen to not do,” Borkhataria mentioned. RBC is not the one agency getting bullish on Chevron. Final month, HSBC upgraded the oil large to purchase from maintain, noting the inventory’s current drop has created a shopping for alternative . — CNBC’s Michael Bloom contributed to this report.
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