In a report released today, Jean Ann Salisbury from Bank of America Securities maintained a Buy rating on Chevron, with a price target of $170.00.
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Jean Ann Salisbury has given her Buy rating due to a combination of factors surrounding Chevron’s strategic positioning and potential growth. The imminent arbitration decision regarding Chevron’s acquisition of Hess could significantly impact the company’s future. If the decision favors Chevron, the acquisition would be transformative, providing Chevron with advantaged oil volumes and geographic diversification, enhancing its portfolio and long-term free cash flow growth. This strategic move would position Chevron strongly for future negotiations and provide a substantial growth driver into the early 2030s.
Even if the arbitration outcome is not in Chevron’s favor, the downside risk is considered limited. Chevron’s current trading close to some U.S. E&Ps on free cash flow yield, combined with its integrated value chain and global exposure, provides a robust foundation. The expected organic growth over the next two years offers Chevron the flexibility to pursue other strategic acquisitions if necessary. Overall, Chevron’s standalone organic cash flow growth supports the price objective of $170, justifying the Buy rating.
In another report released yesterday, RBC Capital also maintained a Buy rating on the stock with a $175.00 price target.