Chevron (CVX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Chevron (CVX) closed the most recent trading day at $111.85, moving -1.11% from the previous trading session. This move lagged the S&P 500's daily loss of 0.9%. Meanwhile, the Dow lost 0.58%, and the Nasdaq, a tech-heavy index, lost 0.93%.

Heading into today, shares of the oil company had lost 6.22% over the past month, lagging the Oils-Energy sector's loss of 3.11% and the S&P 500's gain of 3.3% in that time.

Wall Street will be looking for positivity from CVX as it approaches its next earnings report date. This is expected to be January 31, 2020. On that day, CVX is projected to report earnings of $1.50 per share, which would represent a year-over-year decline of 27.18%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $38.80 billion, down 8.38% from the year-ago period.

It is also important to note the recent changes to analyst estimates for CVX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.91% higher. CVX currently has a Zacks Rank of #2 (Buy).

In terms of valuation, CVX is currently trading at a Forward P/E ratio of 16.94. Its industry sports an average Forward P/E of 12.04, so we one might conclude that CVX is trading at a premium comparatively.

We can also see that CVX currently has a PEG ratio of 4.68. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Integrated - International stocks are, on average, holding a PEG ratio of 1.7 based on yesterday's closing prices.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 226, which puts it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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