Markets

Chevron (CVX) Gains But Lags Market: What You Should Know

Chevron (CVX) closed the most recent trading day at $88.89, moving +0.61% from the previous trading session. This move lagged the S&P 500's daily gain of 0.91%. Meanwhile, the Dow gained 0.85%, and the Nasdaq, a tech-heavy index, added 0.59%.

Prior to today's trading, shares of the oil company had lost 6.04% over the past month. This has lagged the Oils-Energy sector's loss of 2.85% and the S&P 500's gain of 5.26% 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 July 31, 2020. The company is expected to report EPS of -$0.83, down 136.56% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $19.60 billion, down 49.56% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.25 per share and revenue of $108.98 billion, which would represent changes of -96.01% and -25.62%, respectively, from the prior year.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 7.89% higher within the past month. CVX is currently a Zacks Rank #2 (Buy).

In terms of valuation, CVX is currently trading at a Forward P/E ratio of 359.15. This represents a premium compared to its industry's average Forward P/E of 30.22.

Investors should also note that CVX has a PEG ratio of 71.83 right now. 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. The Oil and Gas - Integrated - International industry currently had an average PEG ratio of 15.18 as of yesterday's close.

The Oil and Gas - Integrated - International industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 39, putting it in the top 16% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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