Chevron Corp. (NYSE: CVX) is scheduled to report its second-quarter financial results before the markets open on Friday. The consensus estimates from Thomson Reuters are $0.32 in earnings per share (EPS) on $28.08 billion in revenue. In the same period of last year, the company posted EPS of $0.83 and $40.36 billion in revenue.
Earlier this week, Chevron’s board of directors declared a quarterly dividend of $1.07 per share, which will be payable on September 12 to all holders of common stock as of the close of business on August 19.
This stock is very solid story for investors looking to stay long the energy sector, and it is a preferred U.S. company to own now. With the declaration of its dividend, Chevron sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas (LNG). Some on Wall Street estimate the company will have a compound annual growth rate of over 5% for the next five years.
The company’s Permian Basin assets are a goldmine, and the Australian LNG business will transition from a yearly $8 billion capital consumption drag to a $2 billion to $3 billion contributor. Combined with the much lower overall capital spending for the 2016 to 2018 period, the company is poised to not only hang around, but end the sector slump in a much better position. The analysts note the Permian acreage is profitable at $40 a barrel.
A few analysts weighed in on Chevron ahead of the earnings report:
- Barclays reiterated an Equal Weight rating with a $125 price target.
- Jefferies has a Buy rating with a $116 price target.
- Morgan Stanley reiterated a Hold rating with an $85 price target.
- Credit Suisse reiterated a Hold rating with a $100 price target.
- Argus reiterated a Buy rating.
So far in 2016, Chevron has outperformed the broad markets, with the stock up 16%. The number is basically the same over the past 52 weeks.
Shares of Chevron were trading down about 0.8% at $101.45 on Thursday, with a consensus analyst price target of $110.39 and a 52-week trading range of $101.41 to $101.62.
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