Jefferies reiterated a Buy rating and $110.00 price target on Chevron (NYSE: CVX). Chevron’s free cash flow generation should improve significantly through 2018 through a combination of lower capital spending, production growth and margin expansion. Multiple major capital projects are near completion and should underpin a production CAGR of 5% from 2015-2018. Further, the new sources of production generate cash margins that should be accretive to the existing portfolio.

Analyst Jason Gammel commented, "Chevron remains our top pick in the integrated oil sector. The company is positioned to generate the highest organic production growth amongst its peers, and it has the most dramatic cash cycle inflection in the sector."

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Shares of Chevron closed at $94.26 yesterday.