Chevron tops profit estimates, joins share buyback stampede

Chevron tops profit estimates, joins share buyback stampede

Chevron Corp. is trading up 1.37% at 102.57

Chevron Corp. on Friday reported its highest profit in six quarters and joined an oil industry stampede to reward investors with share buybacks, as rebounding crude oil prices carried earnings and cash flow to pre-pandemic levels. Oil and gas are trading near multi-year highs as fuel consumption has thrown off pandemic losses and natural gas has soared on weather demand. OPEC’s decision to carry production curbs into next year has kept oil trading above $70 per barrel.

The company also cut its annual capital spending forecast. At about $13 billion, it is now below what it had spent last year. It had earlier budgeted $14 billion to $16 billion a year in annual capital and exploratory spending through 2025.

Chevron (NYSE:CVX) last year slashed spending to allow profits to flow at above $50 a barrel. Lower costs and higher prices generated the highest cash flow in two years, enabling the company to pare debt and resume share repurchases, officials said. Share buybacks will resume this quarter at an annual rate of between $2 billion and $3 billion, said Chief Executive Michael Wirth, about half the annual rate it had planned.

The company suspended purchases early last year as the pandemic cut oil demand.

On technical fronts Chevron Corp. RSI stood at 51.27 and currently stock is trading above all Moving Average. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : Chevron Corp. – BUY: 102.57, TARGET: 104.97, STOP LOSS : 101.07

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