What's the value of Chevron, which keeps Buffett adding positions?
On June 20th, the coal stock market weakened at the beginning, and China Coal Energy led the decline. However, since last year, Buffett has been adding positions to Chevron. According to the latest report data, Berkshire increased its positions of Chevron by 120 million shares to 159 million shares in the first quarter, with a market value of USD 25.919 billion, accounting for 7% of Berkshire's total market value in the first quarter, and rising to the fourth largest position. Barclays and Morgan Stanley have offered target prices of $196 and $170 respectively.
Key takeaways:
Barclays: PT $196
Barclays believes that Chevron's earnings per share are higher than expected, while CFPS and output are lower than expected. The updated earnings per share of 2022Q2 is USD 4.83, which is 6% higher than the general expectation, which may be at least partly due to the current natural gas price and QTD refining profit intensity. The higher maintenance cost and the decrease of Rokan PSC production will comprehensively affect the total output of 22Q2. The forecast of the Permian output of Barclays Q2 is slightly down, but the output will rise in the fourth quarter of 2021 and Q1 of 2022, and the output of H2 will continue to rise in 2022, driving the output to increase by 14% in 2022.
Key takeaways:
Barclays: PT $196
Barclays believes that Chevron's earnings per share are higher than expected, while CFPS and output are lower than expected. The updated earnings per share of 2022Q2 is USD 4.83, which is 6% higher than the general expectation, which may be at least partly due to the current natural gas price and QTD refining profit intensity. The higher maintenance cost and the decrease of Rokan PSC production will comprehensively affect the total output of 22Q2. The forecast of the Permian output of Barclays Q2 is slightly down, but the output will rise in the fourth quarter of 2021 and Q1 of 2022, and the output of H2 will continue to rise in 2022, driving the output to increase by 14% in 2022.
2. JP Morgan: PT $170, PE 11.4x
JP Morgan believes that CVX is a large-scale oil enterprise with high quality. In recent years, CVX has shown steady execution, maintained a stable production situation at a lower level of capital expenditure than in the past, and brought a healthy FCF. JP Morgan believes that CVX's valuation fully demonstrates the company's LSD growth potential, which is caused by high-profit assets (Permian, Tengiz) and commitment to long-term capital return plan, which should run through the whole cycle. The market has generally got rid of the recent operational problems of Tengiz and Gorgon. In terms of energy transformation, CVX is stepping up its efforts while maintaining its overall capital discipline, with its core focus on CCUS, hydrogen and renewable fuels.
JP Morgan believes that CVX is a large-scale oil enterprise with high quality. In recent years, CVX has shown steady execution, maintained a stable production situation at a lower level of capital expenditure than in the past, and brought a healthy FCF. JP Morgan believes that CVX's valuation fully demonstrates the company's LSD growth potential, which is caused by high-profit assets (Permian, Tengiz) and commitment to long-term capital return plan, which should run through the whole cycle. The market has generally got rid of the recent operational problems of Tengiz and Gorgon. In terms of energy transformation, CVX is stepping up its efforts while maintaining its overall capital discipline, with its core focus on CCUS, hydrogen and renewable fuels.
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