Chevron Corporation (NYSE: CVX), a company manufacturing and selling a range of refined petroleum products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives, is scheduled to announce its fiscal second-quarter results on Friday, July 28. We expect Chevron stock to likely rise due to revenues and earnings coming in marginally higher than expectations. Oil prices have been surprisingly lower than expected at the beginning of the year. However, oil prices have jumped over the last fortnight – boosted by a falling U.S. dollar and supply cuts by the world’s biggest oil exporters (Saudi Arabia and Russia). Brent futures currently trade at $82.43 a barrel and U.S. West Texas Intermediate crude settled at $78.44 (as of July 25). A report released by OPEC also kept an optimistic outlook for world oil demand despite weak economic growth. It raised its growth forecast for 2023 and predicted only a slight slowdown in 2024, with China and India expected to keep driving the expansion in fuel use. We believe that the energy giant’s fundamentals remain strong, which will likely pave the way for longer-term gains. Also, we believe that rebounding demand and tight supplies can lead to further higher oil prices by the end of the year. Even if oil trends lower, Chevron is among the lowest-cost producers, so it can still generate a tremendous amount of cash.
Our forecast indicates that Chevron’s valuation is around $170 per share, which is 7% higher than the current market price. Look at our interactive dashboard analysis on Chevron Earnings Preview: What To Expect in Q2? for more details.
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