Goldman Sachs analyst Neil Mehta maintained a Buy rating on Chevron on July 21 and set a price target of $172.00.
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Neil Mehta has given his Buy rating due to a combination of factors that highlight Chevron’s promising financial outlook. One of the key reasons is the anticipated increase in volume and free cash flow, driven by significant growth projects in regions like Kazakhstan, the Gulf of America, and the Permian basin. Additionally, Chevron’s capital returns profile is appealing, featuring a dividend yield of around 5%, and the company is making progress in reducing structural costs.
Furthermore, Chevron’s recent announcement of a $53 billion all-stock acquisition of Hess Corporation is expected to enhance free cash flow and production growth beyond 2030, with anticipated annual cost synergies of approximately $1 billion by the end of the year. Although there are concerns about near-term commodity prices and adjusted share repurchase expectations, the closing of the Hess transaction is likely to alleviate investor concerns about inventory life and reserve replacement. Overall, Mehta maintains a positive outlook on Chevron, adjusting the price target to $172, which suggests a potential 19% total return from current levels.
According to TipRanks, Mehta is a 5-star analyst with an average return of 9.0% and a 59.00% success rate. Mehta covers the Energy sector, focusing on stocks such as Chevron, Valero Energy, and Ovintiv.
In another report released on July 21, UBS also reiterated a Buy rating on the stock with a $177.00 price target.