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Goldman Sachs reiterated a Buy rating on Chevron stock following the company’s Investor Day event, which outlined its long-term targets.
Oil and gas giant Chevron (CVX) outlined its 5-year growth targets at its Investor Day event on November 12. The company aims to grow free cash flow and earnings per share by over 10% annually through 2030. It plans to boost oil and gas production while further reducing costs and capital expenditure. Following the updates, Goldman Sachs analyst Neil Mehta reiterated a Buy rating on Chevron stock with a price target of $177, reinforcing his bullish stance on the growth potential of the energy behemoth.
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Goldman Sachs Remains Bullish on Chevron Stock
Mehta noted that Chevron’s focus during the Investor Day event was on key areas such as free cash flow growth, capital expenditure, power solutions, and cost reduction initiatives. Specifically, the company aims to reduce planned capital spending to a range of $18 billion to $21 billion per year, down from its previous guidance of $19 billion to $22 billion. Also, Chevron is targeting cost reductions between $3 billion and $4 billion by the end of 2026, up by $1 billion from the previous range.
The 5-star analyst noted that management’s “high confidence outlook” is backed by lower execution risk, solid cash generation, strong margins, resilient assets, and steady shareholder returns.
“We have long argued that CVX shares should benefit from a volume and free cash flow inflection driven by major Upstream projects, and further supported by the recent HES acquisition,” said Mehta.
The 5-star analyst contended that while some investors are cautious about Chevron’s growing relative Upstream exposure, he expects operational momentum, a solid balance sheet, and a disciplined capital strategy to support the bottom line and ensure “financial resiliency.” Overall, Mehta remains optimistic about Chevron, given its commitment to shareholder returns and structural cost reductions. He is also bullish on newer opportunities in power and exploration.
Is CVX Stock a Buy, Sell, or Hold?
With 11 Buys and four Holds, Chevron stock scores a Moderate Buy consensus rating on TipRanks. The average CVX stock price target of $175 indicates 14.1% upside potential from current levels. CVX offers a dividend yield of 4.3%.
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Source: tipranks.com
