12 Takeaways From Chevron's (CVX) Report - Credit Suisse

Credit Suisse analyst Manav Gupta reiterated an Outperform rating and $127.00 price target on Chevron (NYSE: CVX) after the company reported 2Q 21 EPS of $1.71 vs. Consensus of $1.59. CFO fully covered capex, dividend obligation, and CVX generated ~$2.6Bn in discretionary FCF. The analyst sees 12 key takeaways from the report:

1) No change to TCO expansion capex (positive), and delay of one quarter for WPMP and two quarter for FGP

2) Permian production to hit 600mb/d by YE; currently running 5 rigs but expected to add 2 by year-end

3) At Brent price of $65/bbl; Permian expected to deliver over $3Bn in FCF in 2021

4) Operating costs are on track for a 10% reduction from 2019; 5) Repairs on Gorgon propane exchangers
complete, all 5 LNG trains operational in Australia

6) CVX to resume share repurchase at a targeted annual rate of $2Bn-$3Bn

7) Started co-processing biofeedstock at El Segundo Refinery and looking to grow renewable diesel production

8) Major planned turnarounds to lower volumes by 150mboe/d in 3Q21

9) Lowering 2021 capex by $1Bn, driven by lower spending at TCO ($500M) and greater capital efficiency ($500M)

10) CPChem and Qatar Petroleum still planning to move forward with the 2 JV crackers, but timeline is somewhat uncertain

11) Still planning to spend $3Bn on lower carbon fuels development by 2028, this will include investments in renewable natural gas, renewable diesel, sustainable jet, hydrogen carbon capture

12) On Sep 14, CVX will be hosting its Energy Transition Spotlight to provide more details on how it plans to lower carbon intensity in its operations and grow lower carbon businesses

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 $101.81 yesterday.

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