Chevron Posts Q3 Beat As 'Uncertainty Around Hess Deal Remains,' Analysts Say

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Shares of Chevron Corp (NYSE: CVX) continued to rise in early trading on Monday, after the company reported upbeat third-quarter results.

The San Ramon, California-based company reported its results amid an exciting earnings season. Here are some key analyst takeaways.

  • Truist Securities analyst Neal Dingmann maintained a Hold rating, while raising the price target from $150 to $155.
  • RBC Capital Markets analyst Biraj Borkhataria reiterated an Outperform rating, while lifting the price target from $170 to $175.
  • Scotiabank analyst Paul Cheng reaffirmed a Sector Outperform rating and price target of $163.
Truist Securities: Chevron's third-quarter earnings came in ahead of consensus estimates, with production on a BOE (barrel of oil equivalent) basis topping expectations, although pricing was weaker than anticipated, Dingmann said. "Production benefited from strong growth in the Permian offset by the impacts of hurricanes," he added.

Margins at Chevron's refinery business remained under pressure due to strong supply and "limited incremental demand for petroleum products," the analyst stated. While Chevron is likely to generate "relatively minimal" earnings growth next year due to margin pressure and lower oil, a potential successful acquisition of Hess "would notably change our estimates," he further wrote.

RBC Capital Markets: Chevron reported its earnings and cash flows ahead of expectation, backed by "a solid operational performance," Borkhataria said.

"Record production in the Permian, and strong delivery elsewhere supported CVX's earnings this quarter, and the new structural cost reduction target should help investors re-focus on the investment case," the analyst wrote. While uncertainty around the Hess deal remains, management's commentary around Permian capex peaking in 2024 is likely to boost free cash flows into 2025 and beyond, he added.

Scotiabank: The company's adjusted earnings of $2.51 per share and cash flows of $4.59 per share beat consensus of $2.41 and $4.32, respectively. "Robust Upstream production drove the beat, with the company setting yet another quarterly record in the Permian and achieved record high production in TCO," Cheng said.

Chevron repurchased $4.7 billion of stock in the third quarter, higher than the quarterly run-rate target of $4.375 billion at the midpoint, the analyst stated. The company aims at cost reduction between $2 billion and $3 billion by end of 2026, while targeting another $7 billion in assets sales by 2028, he added.

Price Action: Shares of Chevron had risen by 0.48% to $153.81 at the time of publication on Monday.