Chevron (CVX): Top Integrated Pick at Jefferies
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Jefferies analyst, Jason Gammel, reiterated his Buy rating on shares of Chevron (NYSE: CVX) and raised his price target to $120 from $116 after 3Q16 adjusted EPS of $0.49 soundly beat consensus of $0.37. The Gorgon LNG project achieved full capacity at train 1 and started production at train 2. The value of the company's Permian acreage is at least $37b.
The analyst stated "Chevron remains our top pick in the integrated oil sector. We believe that the inflection in the company’s cash cycle, as capital expenditures recede while production growth from high margin barrels concurrently kicks in will drive significant outperformance".
The company currently trades at 8.3x 2017 EV/DACF versus super-major peers at 8.9x but the analyst believes the cash cycle improvements warrant a premium versus the peer group average.
Shares of Chevron closed at $103.82 yesterday.
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