Chevron Corporation (NYSE:CVX), a global leader in the oil industry, is scheduled to unveil its first-quarter results on Friday, April 26, sparking keen interest among investors.
Throughout the year, CVX’s stock has displayed a steady upward trend, registering notable gains. This growth can be attributed to the company’s strong position in the Energy sector. With a year-to-date increase of approximately 7.3%, Chevron’s stock has outpaced the S&P 500 index.
Fueling this ascent has been the recent surge in oil prices, which has significantly bolstered CVX’s performance. Elevated oil prices play a pivotal role in driving revenues and cash flows within Chevron’s key upstream operations.
During the first quarter of 2024, oil prices experienced a significant rally, with both Brent and West Texas Intermediate (WTI) crude futures witnessing substantial increases. Brent crude, the global benchmark, surged by nearly 14%, while WTI, tracking U.S. crude, saw an increase of approximately 16%. As of the latest data, Brent crude settled at $89.89 per barrel, while WTI closed at $85.06 per barrel.
Various factors, including ongoing production cuts by major oil-producing nations and geopolitical tensions, contributed to this upward trend in oil prices.
As investors await Chevron’s Q1 earnings report, it’s pertinent to note that the company has surpassed earnings expectations in three out of the last four quarters. The odds of beating estimates this time are uncertain. Analysts project a 20% year-over-year decline in Q1 earnings to $2.84 per share, with sales expected to decrease by 1.6% to $50 billion.
Investors should closely monitor Chevron’s production levels, which rose by 12.7% in the last quarter and are anticipated to increase again in Q1, driven by the PDC Energy acquisition and strong output in the Permian Basin region.
Looking ahead, Chevron shares are moderately priced, trading at 11.78 times forward earnings, slightly above the industry average. The company’s annual earnings are forecasted to increase by 3.4% in 2024 and by 15.3% in 2025, with sales expected to rise by 3.2% this year and by 5.6% in 2025.
In conclusion, Chevron’s pending acquisition of Hess Corporation for $53 billion reaffirms its position as a major player in the energy sector. While the outcome of the quarterly report remains uncertain, Chevron remains an attractive stock for long-term investment.
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Author Stephanie Bédard-Châteauneuf