Chevron stock falls as company struggles with ‘sub-$50’ crude prices

Chevron stock falls as company struggles with ‘sub-$50’ crude prices

Chevron Corp. is smarting from lower prices for crude oil and no longer seems to be Wall Street’s pick among integrated oil giants.


earlier Friday reported a surprise fourth-quarter loss and sales that were below expectations. The stock dropped more than 4% Friday, on track for its lowest close in more than four weeks and down six out of seven sessions.

With several other energy companies slated to report results in the next few days, it remains to be seen how Chevron will fare in relation to others, analysts at Citi, led by Alastair Syme, said in a note on Friday.

But the “absolute metrics do not make for great reading. Reserve life has fallen, despite the acquisition of Noble’s deep inventory, the balance sheet has expanded by 50% and growth is being impaired,” they said.

Related: Here are Wall Street’s favorite oil stocks for a 2021 recovery

The broader message is that Chevron and other international oil companies are “not well suited to a sub-50s oil price world,” they said. Chevron, long preferred over competitor Exxon Mobil Corp., is no longer leading peers. Crude prices have traded higher in recent sessions, but have hovered around the low $50s a barrel for a year.

See also: OPEC’s Barkindo stresses importance of oil market stability and investment

Analysts at Raymond James, led by Justin Jenkins, see Chevron’s outlook improving this year.

Fourth-quarter results were near their expectations of slightly stronger exploration and production results offsetting “softer” earnings from refining and other downstream operations, they said.

Meanwhile, Exxon

is scheduled to report its fourth-quarter earnings before the bell on Tuesday.

Analysts polled by FactSet expect Exxon to report adjusted earnings of 1 cent a share on sales of $46.6 billion. That would compare with adjusted earnings of 41 cents a share on sales of $67.2 billion in the fourth quarter of 2019.

Several analysts in recent weeks turned positive on Exxon, including JPMorgan analysts who rated the stock a buy for the first time in 7 years.

Chevron shares have lost 23% in the past 12 months, while Exxon shares have dropped 30%. That contrasts with gains around 14% for the S&P 500 index.

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