Chevron U.S.A, a subsidiary of Chevron Corporation (NYSE: CVX), recently announced that it has entered into an agreement with Iwatani Corporation of America, a wholly-owned subsidiary of Iwatani Corporation, to develop 30 hydrogen fueling sites in California by 2026.
Following the news, shares of the company remained static to close at $135.55 in Thursday’s extended trading session.
Details of the Agreement
Under the terms of the agreement, Chevron will fund the construction of the sites that are likely to be situated at Chevron-branded retail locations across the state. Iwatani, on the other hand, will operate and maintain the hydrogen fueling sites and provide hydrogen supply and transportation logistics services.
Initially, the stations will cater to light-duty vehicles, while the companies expect to develop the flexibility to service heavy-duty vehicles in the long term.
Management Commentary
The President of Americas Fuels & Lubricants for Chevron, Andy Walz, said, “Chevron believes that hydrogen has the potential to assist in lowering the carbon emissions of the transportation sector and other hard-to-decarbonize industries. We are excited to work with Iwatani to advance the entire hydrogen transportation value chain from production to consumer purchase in order to help our customers lower their lifecycle transportation carbon intensities.”
Stock Rating
Recently, Cowen & Co. analyst Jason Gabelman reiterated a Buy rating on the stock. The analyst, however, raised the price target from $133 to $140, which implies upside potential of 3.8% from current levels.
Consensus among analysts is a Strong Buy based on 12 Buys and 4 Holds. The average Chevron stock prediction of $142.08 implies upside potential of 5.4% from current levels. Shares have gained 31.8% over the past year.
Positive Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on CVX, as 19.5% of portfolios tracked by TipRanks increased their exposure to CVX stock over the past 30 days.
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