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On Friday, Mizuho (NYSE:MFG) Securities reiterated its Outperform rating on Chevron (NYSE:NYSE:CVX) with a consistent price target of $195.00. The focus of Chevron's upcoming financial review is expected to be on the company's core assets, as nearly two years have passed since the last Analyst Day event.
Chevron's fourth quarter 2024 earnings before interest, taxes, depreciation, amortization, and exploration (EBITDAX) and earnings per share (EPS) are projected to face a 4% and 12% headwind, respectively, compared to the Street's expectations. T
his is attributed to weaker pricing and refining margins. However, Chevron's strategic adjustments have been noted, such as the December announcement of its 2025 capital plan, which prioritizes free cash flow by reducing growth spending in the Permian Basin.
The company's pivot to cash generation mode is evident in its other assets, which are either already generating cash or are transitioning to do so. With net debt-to-capitalization ratios post-asset sales at approximately 10%, Mizuho analysts are interested in Chevron's potential strategies to enhance shareholder cash returns, especially in the context of a possibly weaker commodity price environment.
The firm's confidence in Chevron is further underscored by maintaining its designation of the stock as a Top Pick. Investors will be looking for further details from Chevron regarding its approach to capital allocation and shareholder returns amid the current financial landscape.
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