UBS Raises Price Target on Chevron (CVX) Following 3Q Earnings and Guidance
UBS reiterated a Neutral rating on Chevron (NYSE: CVX), and raised the price target to $95.00 (from $87.00), following the company's 3Q earnings results and guidance. Adjusted EPS was $1.01, above consensus of $0.76. CVX provided a 2016-17 capex guidance range of ~$25-$28bn and $20-$24bn.
Analyst William Featherston commented, "CVX provided a 2016-17 capex guidance range of ~$25-$28bn (including affiliates) and $20-$24bn, well below 2015 spending of ~$35bn as major capital spending rolls off with several large projects coming on stream. Assuming affiliate spending of ~4bn per annum (excluded in consensus), CVX's '16-17 capex range of ~$21-$24bn and $16-$20bn is well below consensus of ~$28.1bn and $24.9bn, respectively. Meanwhile, CVX expects 2017 volume growth of 13-15% per annum (or ~2.90-3.0 MMBoed by 2017, excluding asset sales), slightly below its prior target of ~3.1 MMBoed but roughly in line with consensus. We estimate CVX can achieve cash flow neutrality after the divi at $55/Bbl Brent, below the $70/Bbl target it outlined in March."
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Shares of Chevron closed at $90.88 yesterday.