Chevron: Solid Fundamentals but Limited Upside Justify Hold Rating

HSBC analyst Kim Fustier downgraded the rating on Chevron to a Hold today, setting a price target of $180.00.

Kim Fustier has given his Hold rating due to a combination of factors related to both Chevron’s solid fundamentals and its current valuation. He acknowledges that Chevron continues to execute well operationally, with recent earnings exceeding expectations, strong upstream performance, and ongoing structural cost reductions that should enhance margins over time. The company’s medium-term guidance, including stable capital spending and projected production growth of 7-10% by 2026, is viewed as credible and already largely de-risked, while incremental upside from Venezuela is considered too small to materially change the investment case.

At the same time, Fustier argues that much of this strength is now reflected in the share price after a 16% year-to-date rally driven by optimism around Venezuela and higher oil prices. His new target price of USD180 implies only around 2% further upside, suggesting limited near-term reward relative to risk. He also notes that Chevron’s valuation discount versus ExxonMobil appears reasonable at current levels, and that its forecast distribution yield for 2026 is less attractive than that of several European peers. These factors lead him to see the stock as fairly valued rather than compelling, justifying a Hold rather than a Buy recommendation.

In another report released on January 30, TipRanks – DeepSeek also reiterated a Hold rating on the stock with a $182.00 price target.