Bank of America Securities analyst Doug Leggate on Monday upgraded petroleum refinery company Chevron (NYSE:CVX) to a Buy rating from a previous Neutral. The analyst also increased his price target for the stock to $200 from $190.
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In a note to clients on Monday, Leggate said the recent CVX stock selloff in reaction to the company’s Q3 earnings miss and planned merger with Hess (NYSE:HES) was unnecessary and an overreaction. However, the analyst noted that the stock’s weakness presented a good buying opportunity, which informed the upgrade.
Despite investor skepticism around the planned Hess acquisition, Leggate noted potential upsides to the deal. The analyst stated that the successful conclusion of the Hess deal would reset Chevron’s investment outlook.
“Assuming the potential deal closes on the agreed terms, any rational assessment of what drives recognition of value concludes CVX investment case has been reset by favorable rate of change on growth, dividend capacity (and) portfolio depth,” Leggate said in the note.
Shares of the oil giant traded marginally higher in Monday’s afternoon trading session. Chevron shares have lost about 16% this year, with the significant drops coming in the past 7 days.
Is CVX a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CVX stock based on nine Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average CVX price target of $184.50 per share implies a 27.14% upside potential.
