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Chevron (CVX) Surges 4.3%: Is This an Indication of Further Gains?

Chevron (CVX) shares ended the last trading session 4.3% higher at $109. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 17.4% gain over the past four weeks.

Chevron extended its rally for the fifth straight day, driven by optimism over the OPEC+ cartel’s surprise decision to extend the oil production cuts till the end of April. The stock has also been driven up by an earlier-than-expected pickup in the commodity’s demand on the back of successful deployment of COVID-19 vaccines. The recovery in crude prices to more than $65 a barrel has pushed energy activity higher and contributed to the strength in Chevron. Further, an improving macro environment for energy prompted Goldman Sachs analyst Neil Mehta and Wells Fargo analyst Roger Read to raise their respective price targets on the integrated major.

Price and Consensus

Price Consensus Chart for Chevron
Price Consensus Chart for Chevron

This oil company is expected to post quarterly earnings of $0.76 per share in its upcoming report, which represents a year-over-year change of -41.1%. Revenues are expected to be $29.32 billion, down 6.9% from the year-ago quarter.

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While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Chevron, the consensus EPS estimate for the quarter has been revised 11.8% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CVX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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