Chevron upgraded to Outperform from Sector Perform at RBC Capital - InvestingChannel

Chevron upgraded to Outperform from Sector Perform at RBC Capital

RBC Capital upgraded Chevron (CVX) to Outperform from Sector Perform with a price target of $180, up from $165. The company has effectively used its premium multiple to acquire companies in recent years, with the recent PDC Energy (PDCE) acquisition another example of this, the analyst tells investors in a research note. The firm says Chevron purchased a company trading at a materially higher free cash flow yield, “driving accretion across key metrics.” While the macro environment is likely to remain volatile, weaker end product demand and OPEC+ managing the oil market leaves Chevron’s upstream heavy weighting well-placed, says RBC. It believes the company’s “fortress” balance sheet and commitment to remaining disciplined through organic and inorganic activity “should prove defensive over time.”

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