Barclays Maintains an 'Overweight' on Chevron (CVX); Brazil Lawsuit: $10.6 Billion for 3,000 Barrels of Spill?
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Price: $200.00 +1.16%
Rating Summary:
27 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
27 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Overweight' on Chevron (NYSE: CVX) price target of $138.00.
Barclays analyst says, "Yesterday afternoon (12/14), the Ministerio Publico Federal (MPF) in Campos, Brazil announced plans to file a civil lawsuit against Chevron (NYSE: CVX) and Transocean (NYSE: RIG) seeking R$20bn (USD $10.6bn) in environmental damages relating to the oil spill from the Frade field, as well as a court injunction to suspend the two companies' activities in the country because of their lack of preparedness in handling the spill."
"Although the headlines caused the shares to fall dramatically, we do not think the decline was warranted as the lawsuit's demands seem outlandish in comparison to the actual damages and events that unfolded. The shares' market cap decline of $3.4bn relative to XOM on a percentage decline basis already exceeds 30% of the potential $10.6bn fine and is close to our estimate of the company's Brazilian asset valuation of $4.1bn. That said, we do not expect the stock to recover its relative performance until after the New Year, given investors' anxious sentiment."
For an analyst ratings summary and ratings history on Chevron click here. For more ratings news on Chevron click here.
Shares of Chevron closed at $100.53 yesterday.
Barclays analyst says, "Yesterday afternoon (12/14), the Ministerio Publico Federal (MPF) in Campos, Brazil announced plans to file a civil lawsuit against Chevron (NYSE: CVX) and Transocean (NYSE: RIG) seeking R$20bn (USD $10.6bn) in environmental damages relating to the oil spill from the Frade field, as well as a court injunction to suspend the two companies' activities in the country because of their lack of preparedness in handling the spill."
"Although the headlines caused the shares to fall dramatically, we do not think the decline was warranted as the lawsuit's demands seem outlandish in comparison to the actual damages and events that unfolded. The shares' market cap decline of $3.4bn relative to XOM on a percentage decline basis already exceeds 30% of the potential $10.6bn fine and is close to our estimate of the company's Brazilian asset valuation of $4.1bn. That said, we do not expect the stock to recover its relative performance until after the New Year, given investors' anxious sentiment."
For an analyst ratings summary and ratings history on Chevron click here. For more ratings news on Chevron click here.
Shares of Chevron closed at $100.53 yesterday.
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