This article first appeared on GuruFocus.
Chevron (NYSE:CVX) has cash to spare after rewarding shareholders. The integrated energy producer’s shares fell 1.59% to $231.77 at 10:00 a.m. ET on November 2, even as UBS raised its price target to $265 from $235 and maintained a Buy rating. That 12.8% target increase puts the focus on whether Chevron can keep generating cash well above its dividend and buyback commitments.
The quarterly numbers give investors something concrete to assess. Chevron’s October 30 earnings materials reported adjusted earnings of $10.4 billion, or $5.28 per share, alongside $14.2 billion in adjusted free cash flow. Against $6 billion in shareholder distributions, that represents roughly 2.4 times coverage and an $8.2 billion surplus on the company’s adjusted measure. That cushion could support future capital returns if cash generation holds up.
The GuruFocus snapshot adds a reason for restraint: Chevron scores 62 out of 100, with financial strength standing out while momentum looks weak. Its price-to-earnings ratio of 16.95 provides valuation context, but does not establish that shares are cheap. The next test is whether commodity prices, working-capital movements and spending allow Chevron to repeat that cash surplus. One strong quarter gives investors breathing room; sustained coverage would make the payout case more convincing.
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
