Oppenheimer Cuts Chevron Price Target On The Back Of Lower Oil Prices

Oppenheimer analyst Fadel Gheit reiterated an Outperform rating on Chevron (NYSE:CVX) and reduced his price target to $130 (from $140), which implies an upside of 18% from current levels.

Gheit said, “Based on oil futures and guidance, we estimate operating cash flow of $35.3B in 2014 and $30.6B in 2015. Based on CAPEX of $35.3B and $33.5B and dividend of $7.9B and $8B, CVX could face cash flow shortfalls of $7.8B this year and $10.9B next year, before asset sales and buybacks. Assuming asset sales of $2.9B and buybacks of $5B, the cash flow shortfall could be $10.0B this year. The 2015 cash flow shortfall could reach a record $14.9B after buybacks minus any proceeds from asset sales, and could be funded from additional borrowing. We nudge up ’14E EPS to $9.65 but trim ’15E to $6.15; trim price target to $130 from $140.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Fadel Gheit has a total average return of 7.3% and a 59.7% success rate. Gheit has a 6.2% average return when recommending CVX, and is ranked #693 out of 3398 analysts.

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