At its Annual Investor Day held yesterday, U.S. oil and gas explorer Chevron Corporation (NYSE: CVX) said it plans on delivering higher returns to shareholders while advancing towards a lower carbon future.
Following the news, shares marked an all-time high of $149.96 and ended the day up 4% at $149.72 on March 1. CVX stock has gained 53.3% over the past year.
Increased Returns & Financial Highlights
Chevron has decided to increase its share buyback program in the range of $5 billion to $10 billion annually from prior guidance of $3 billion to $5 billion per year.
Additionally, the company is focusing on increasing its return on capital employed to 12% in 2026 at $60 Brent by employing a more capital-efficient investment program, lower unit costs, and increased production.
Similarly, the company is expecting a 10% compound annual growth rate (CAGR) in operating cash flow per share by 2026, at $60 Brent.
Chevron has said that through 2026, it will spend in the range of $15 billion and $17 billion towards annual organic capital and exploratory expenditures.
Further, the company aims to reduce 2026 operating expenses by more than 10% per barrel over 2021 levels. Meanwhile, an oil and gas production CAGR of more than 3% by 2026 is targeted.
The company reaffirmed its target to lower the carbon intensity of its operations and grow new energy business lines in renewable fuels, hydrogen, carbon capture, and offsets.
Official Comments
Commenting on the occasion, Chairman and CEO of Chevron, Michael Wirth, said, “We’re aiming to grow cash flow and return more of it to shareholders, leveraging our strengths to deliver lower carbon energy to a growing world.”
“I believe Chevron is well positioned for the future with a leading traditional energy business and faster-growing new energy business lines… Combined with our strong track record of financial and operating discipline, we expect to deliver on our objective of higher returns and lower carbon that will benefit stakeholders for years to come,” Wirth concluded.
Wall Streets’ View
Following yesterday’s updates, Raymond James analyst John Freeman lifted the price target on the CVX stock to $173 (15.5% upside potential) from $150, while maintaining a Buy rating.
Similarly, ahead of investor day, Bank of America analyst Doug Leggate maintained a Buy rating on the stock while raising its price target to $167 (11.5% upside potential) from $160.
Overall, the stock has a Moderate Buy consensus rating based on 10 Buys and 4 Holds. The average Chevron price target of $150.88 implies 0.77% downside potential to current levels.
Blogger Opinions
TipRanks data shows that financial blogger opinions are 93% Bullish on CVX, compared to a sector average of 72%.
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