Chevron Corporation (CVX) is a Trendy Stock: Facts to Know Before Betting on It

Chevron (CVX) is one of the stocks most recently visited by Zacks.com visitors. Therefore, it may be a good idea to consider some of the factors that may affect the short-term performance of the stock.

Over the past month, shares of this oil company have returned + 7.5% compared to a + 0.3% change in the Zacks S&P 500 composite. During this period, Shakespeare Oil & Gas - Integrated - International Industries, which includes Chevron, grew by 12.5%. Now the important question is: what could be the future direction of the stock?

While rumors about a media release or a significant change in a company's business prospects usually make its stock a 'trend' and cause a quick change in prices, there are always some basic facts that will eventually buy and Holds Hold's decision-making.

Evaluate revenue estimates

Here at Zacks, we prefer to estimate changes in the company's future earnings estimates on anything. This is because we believe that the current value of his future earnings determines the fair value of his stock.

Our analysis is based primarily on how stock-side sales-side analysts are revising their earnings estimates to keep up with the latest business trends. When a company's earnings estimate increases, so does the fair value of its stock. And when the fair value of a stock exceeds its current market value, investors tend to buy the stock, causing its value to rise. Because of this, experimental studies point to a strong correlation between earnings estimates revisions and short-term stock price movement trends.

Chevron is expected to post earnings of 65 4.65 per share for the current quarter, representing a year-over-year change of + 171.9%. In the last 30 days, the consensus estimate of Zacks has changed by -4%.

The consolidated earnings estimate of .9 16.95 for the current fiscal year indicates a year-on-year change of + 108.5%. This estimate has changed + 1.3% in the last 30 days.

The story continues.

For the next fiscal year, the consolidated earnings estimate of $ 15 indicates a change of -11.5%, which Chevron will report a year earlier. Over the past month, the estimate has changed + 110%.

With an impressive externally audited track record, our proprietary stock rating tool - Zacks Rank - is a more definitive indication of the stock's near-term price performance, as it effectively powers the revision of earnings estimates. Uses from The recent change in the size of the consensus estimate, along with three other factors related to earnings estimates, has resulted in Zacks ranking # 3 (hold) for Chevron.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 months EPS

12 months consensus EPS estimate for CVX _12MonthEPSChartUrl

Expected revenue growth

Although revenue growth is the highest indicator of a company's financial health, nothing happens if a business is unable to increase its revenue. However, it is almost impossible for a company to increase its revenue in the long run without increasing its revenue. Therefore, it is important to know the potential growth of the company.

For Chevron, the consolidated sales estimate for the current quarter of $ 54.35 billion represents a year-on-year change of + 44.6%. For the current and next fiscal years, estimates of $ 218.78 billion and $ 211.91 billion indicate changes of + 34.7% and -3.1%, respectively.

Last reported results and surprise history

Chevron reported revenue of $ 54.37 billion in the last reported quarter, representing a year-on-year change of + 69.8%. The PS 3.36 EPS for the same period compares to $ 0.90 a year ago.

Compared to the Zacks consensus estimate of $ 47.01 billion, the reported revenue represents a surprise of + 15.66%. The EPS surprise was -2.33%.

Over the past four quarters, Chevron has twice surpassed agreed EPS estimates. The company has topped the consensus estimates each time during this period.

Value

No investment decision can be effective without considering the valuation of the stock. In predicting the future performance of a stock, it is important to determine whether its current value accurately reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing current values ​​such as earnings from the company (P / E), sales from the price (P / S) and cash flow from the price (P / CF), historical values ​​help determine whether Whether the stock has a good value, high value or low value, comparing the company with its peers on these parameters gives a good idea of ​​the reasonableness of the stock price.

Zacks Value Style Score (part of the Zacks Style Scores system), which focuses on both conventional and non-conventional values ​​so that stocks can be graded from A to F (one is better than An B; one is better than C); And so on), is very helpful in identifying whether a stock is valued high, valued correctly, or temporarily depreciated.

Chevron is rated B on this front, indicating that it is trading at a discount to its peers. Click here to see some of the valuation matrix values ​​that have advanced this grade.

Bottom line

The facts discussed here and a lot of other information on Zacks.com can help determine if it is worthwhile to pay attention to what the market has to say about Chevron. However, its X-Rank # 3 suggests that it could perform in a broader market in the near term.

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