Company Update (NYSE:CVX): Chevron Corporation Affirms Production Growth; Announces New Spending Cuts

Chevron Corporation (NYSE:CVX) hosted its annual security analyst meeting in New York where executives reiterated priorities, expressed confidence in the company’s near term outlook and emphasized an advantaged position when markets rebound.

“We’re completing major projects that have been under construction for several years. This enables us to grow production and reduce spending at the same time, which should improve our net cash flow significantly,” said John Watson, Chevron’s chairman and chief executive officer. Watson reiterated the importance of dividend growth and maintaining a strong balance sheet in the company’s financial priorities, noting the company’s record of 28 consecutive years of dividend increases, and plans to limit debt increases beyond 2016.

“Industry conditions are tough right now, with low oil and natural gas prices. We believe markets will improve, and we’ll be well positioned when they do,” Watson continued. “We have an excellent upstream and downstream portfolio, and we are driving operating and administrative efficiencies across the company.”

Jay Johnson, executive vice president, upstream, highlighted key plans. “We’re focused on safe, reliable operations and effective project start-ups and ramp-ups. At Gorgon, we’re producing LNG and the first cargo is expected to ship next week. With an advantaged position in the Permian and a deep portfolio of operating assets, we’re transitioning our spending to more short-cycle, higher-return activity that utilizes existing infrastructure. We have a portfolio of assets that should allow production growth through the end of the decade, even at moderate prices.” (Original Source)

Shares of Chevron closed yesterday at $90.67. CVX has a 1-year high of $112.20 and a 1-year low of $69.58. The stock’s 50-day moving average is $84.20 and its 200-day moving average is $84.25.

On the ratings front, Chevron has been the subject of a number of recent research reports. In a report issued on February 1, Credit Suisse analyst Edward Westlake maintained a Hold rating on CVX, with a price target of $84, which represents a potential downside of 7.4% from where the stock is currently trading. Separately, on January 7, Deutsche Bank’s Ryan Todd maintained a Buy rating on the stock and has a price target of $103.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Edward Westlake and Ryan Todd have a total average return of 7.7% and -8.0% respectively. Westlake has a success rate of 57.4% and is ranked #571 out of 3698 analysts, while Todd has a success rate of 35.1% and is ranked #3552.

Overall, 2 research analysts have assigned a Hold rating and 6 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $102.00 which is 12.5% above where the stock closed yesterday.


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