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Is Chevron Stock A Buy?

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Chevron (CVX) The Chevron stock one of the leaders in the broad array of energy stocks that have put up outstanding price gains to date this year. The Dow Jones stock was up nearly 46% year up to May 16 and was trading near new heights in a market that has seen a lot of stocks drop.

Chevron and other stocks of gas and oil are a safe haven for investors despite the recent volatility. First-quarter earnings boosted by soaring oil and gasoline prices helped propel Chevron stock to a record peak on Monday, but the shares soon declined. You should consider including this stock in your portfolio?

Currently, the stock market has been under pressure, so it’s not necessarily the ideal time to be purchasing stocks, but it’s is a great time to find the top stocks to watch. Investors should seek out leading companies from the most reputable industry groups which are performing better than the market. You might also consider buying small amounts of stocks that appear promising in case the market decides to rally.

Chevron Technical Analysis

Chevron stock tried to break out above the 174.86 buy point after a flat base. Chevron stock broke above the buy level on May 16, but were turned away at this level. After a brief dip, the stock slipped into the sell zone of 7 but was able to maintain support near the 50-day line. Shares then reversed higher and reclaimed the buy point. After a couple of weeks of trading in the buy zone of 5 however, the price has fallen lower, yet again, trying to find support near the 21-day line.

After a successful breakout last month, Chevron stocks jumped to brand new heights. Shares have held above their 50-day moving average ever since the breakout, and even forming the current flat base however, there have been a few losses in the last few weeks.

Chevron stock is still holding an impressive Relative Strength Score of 97. This is over the minimum of 80 required for growth stock contenders. In the ideal scenario, its Relative Strength Line should sit near or at a new high when a stock breaks out. Chevron has that check mark as well.

Another reason to think about the CVX stock forecast is its current ownership by funds. Chevron stock saw an uptick in mutual fund ownership for the most recent quarter. It was 2,850 funds that owned Chevron stock during the March-ended quarter. This was an increase from 2,774 funds in the previous quarter.

Chevron Stock No. 2 in its industry

As per IBD Stock Checkup, Chevron stock is ranked No. 1 on the Composite Rating in the integrated oil and gas industry group.

Because of soaring oil prices, which rose over the course of the year, rising to over $100 a barrel from below $72 at the close of 2021, two of the U.S.’s biggest oil companies, Chevron and Exxon Mobil (XOM) both reported substantial profits for the quarter that ended in March.

The prices of natural gas and oil continue to increase following the Russian invasion of Ukraine, and this will no doubt have helped Chevron. Chevron, which is based in California, stated in an investor day presentation that it’s increasing production in the Permian Basin. This Permian Basin is the largest U.S. production area, which is a huge shale field which spans Texas along with New Mexico.

Chevron’s production that is unconventional, which usually involves horizontal drilling as well as Fracking, increased to an all-time high of 692,000 barrels oil equivalent per day in the Permian Basin during the first quarter. The company increased its 2022 production guidance for the area to between 700,000 and 750,000 barrels per day. This is an increase of around 15% from 2021. The company is on track to boost the Permian Basin’s output to one million barrels per day in 2025.

It is however clear that Chevron is not seeking to ramp up overall production to the extent that it would like. Typically when gasoline and oil prices climb, oil firms invest heavily in growing production. In the present, Chevron is reaping higher profits without trying to overflow the market with an increase in production too fast.

In an earlier New York Times story, CEO Michael Wirth noted that Chevron’s hesitance to invest heavily in expanding production is due to the high degree of uncertainty in the global economy today. “One of the lessons we have learned from history is that just as the bad times don’t last forever, neither do periods of strong prices.”

“It’s all about getting our machine back in operation. The last two years have been turbulent and unpredictable,” Wirth said. Wirth added that Chevron is “on a path to achieving greater returns.”

Chevron is an integrated company for oil and gas This means that it takes an active role in all components of business. This includes the upstream (production) as well as intermediate (pipelines as well as storage) and downstream (refining and marketing) operations. Chevron is able to divide its reporting into two segments: upstream and downstream.

The upstream portion consists of exploring , developing production of crude oil and natural gas. The company also rolls the product transport, storage and marketing aspects of their upstream division. Chevron’s downstream segment is comprised mainly of refining crude oil into petroleum products and the manufacture of renewable fuels.

On the 29th of April, Chevron reported Q1 revenue of $54.4 billion, an increase from $32 billion during the same period in 2021. That’s an increase of 70% in comparison to the previous year. EPS was up to $3.25 per share, up from 90 cents, an increase of 261%.

Earnings from U.S. upstream operations totaled $3.24 billion in the first quarter, up from $941 million a year earlier. The international upstream division generated $3.7 billion, as compared to $1.41 billion the year before. Upstream was the main source of all of the company’s revenue for the quarter.

Is Chevron Stock A Buy?

Chevron stock is not to be purchased right now. There is a risk that the market has returned to an uptrend under tension after briefly beginning another uptrend, which underscores the volatility of the present environment. Additionally, it is important to note that Chevron stock was rejected twice when it was at the buy-point and fell back into its base.

Just below the 5% buy zone, Chevron stock may be purchaseable when it is able to regain it’s buy price. However, investors must wait for the stock to go up and stay above the 174.86 buy price.

Investors looking to buy shares could initiate an initial position of a smaller size if the stock can hold above its proper entry, although it would be an unwise investment. The best strategy is to use a pyramid strategy to create an investment, which will safeguard against losses of a large size. Volatile markets can be unforgiving in this way, and it’s best to be in the direction of caution.