Oil giant Chevron (NYSE:CVX) stated in its company filing on Tuesday that it expects to incur a non-cash impairment charge of $3.5 billion to $4 billion in its fourth quarter on some of its upstream assets, particularly in California. Chevron indicated that it continued to face “regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans.”
Moreover, the company will also recognize a loss for abandonment and decommissioning obligations tied to its previous sale of oil and gas assets in the U.S. Gulf of Mexico. This is because the buyers have filed for protection under the Chapter 11 bankruptcy code, leading to a likelihood that some obligations will “revert to the company.”
Is CVX a Buy or Sell?
Analysts remain cautiously optimistic about CVX stock with a Moderate Buy consensus rating based on 12 Buys and six Holds. CVX stock has slid by more than 10% over the past year, and the average CVX price target of $179.59 implies an upside potential of 19.2% at current levels.
