Devin McDermott, an analyst from Morgan Stanley, maintained the Buy rating on Chevron. The associated price target was raised to $180.00.
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Devin McDermott has given his Buy rating due to a combination of factors that highlight Chevron’s strong financial outlook and strategic initiatives. Chevron’s investor day presentation emphasized their plans for robust free cash flow (FCF) and earnings per share (EPS) growth, projected at over 10% compound annual growth rate (CAGR) from 2025 to 2030, supported by low-risk investment opportunities. The company has demonstrated capital discipline by reducing its capital expenditure guidance to $18-$21 billion annually through 2030, which is $1 billion lower than previous estimates.
Furthermore, Chevron’s upstream segment is expected to be a significant growth driver, contributing approximately 7 percentage points to the FCF CAGR through 2030, with anticipated production growth and margin improvements. The company’s strategic focus on the Permian Basin, with advanced chemical treatments and reduced capital expenditure, aims to sustain production and generate substantial annual FCF. Additionally, Chevron’s commitment to shareholder returns is evident in their reiterated annual share buybacks of $10-$20 billion, alongside increased synergy and cost reduction targets, enhancing their overall financial performance and resilience.
In another report released yesterday, Bank of America Securities also maintained a Buy rating on the stock with a $183.00 price target.