Chevron raises yearly stock buyback target rate to $17.5 billion

By Scott Kanowsky

Investing.com -- Chevron Corp (NYSE: CVX) has raised its outlook for its annual rate of share repurchases, as the U.S. oil company said it expects to see high return production growth that could help offset a recent slip in crude prices.

The California-based group said it will buy back stock at a targeted rate of $17.5 billion starting in the second quarter, up from its prior level of $15.2B in the final three months of last year. Its guidance range for buybacks was also bumped up to between $10B and $20B per year.

“We have the capital discipline and balance sheet strength to offer a differentiated value proposition,” said Chevron Chief Financial Officer Pierre Breber in a statement.

“We’re winning back investors with consistent and growing cash returned to shareholders across the commodity price cycle.”

The firm added that it sees annual free cash flow growth of greater than 10% at Brent crude prices of $60 a barrel. The U.S. benchmark currently has dropped by over 30% since increasing above $120 per barrel last summer.

Analysts at Vital Knowledge noted that while the announcement is positive, the uptick in the target repurchase rate is modest.

Shares in Chevron moved slightly higher in premarket U.S. trading on Tuesday.

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