We are maintaining our Buy recommendation for San Ramon, California-based Chevron Corporation (CVX), the 4th largest publicly traded oil and gas company, based on proved reserves, following the company's third-quarter results, which benefited from strong upstream and much-improved downstream performance.
While a weak oil price environment may weigh on the stock over the coming weeks, given its above-average oil-price leverage, the company's long-term outlook has significantly improved. We believe that Chevron's strong pipeline of development projects and impressive recent exploration successes have significantly improved its long-term upstream growth prospects.
On November 3, Chevron agreed to sell its marketing businesses in Kenya and Uganda to Total SA (TOT). We believe that the company is capable of generating above peer group average production and reserve growth in the long run. Our unchanged $100 price objective is based on 9.9x our revised 2009 EPS estimate, in-line with its historical trading pattern relative to its peers.
Read the full analyst report on CVX
Read the full analyst report on TOT
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