Chevron Estimates Cut At Goldman Sachs; Firm Notes 'Lackluster' Dividend, Maintains Sell
In a report published Friday, Goldman Sachs analyst Neil Mehta maintained a Sell rating on Chevron Corporation (NYSE: CVX), while lowering the price target from $99 to $97. The estimates have also been lowered following the company's production announcements through the past month.
"Chevron's 2015 E&P volumes due to the delay of the Big Foot project in the Gulf of Mexico and the Partitioned Zone in the Middle East. We also update our US refining utilization and international E&P cost assumptions post 2015," Mehta reported.
The analyst also expects "sluggish" dividend growth for Chevron, while adding, "We believe integrated oil investors need to focus on dividend growth and not dividend yield, especially in a scenario where interest rates rise."
Chevron is unlikely to be able to generate enough cash flow to be able to grow dividends beyond 2 percent per annum, given the Brent oil price expectations for 2016-2018. The analyst also believes that there could be risk to the company achieving its 2017 production guidance, even if it is able to achieve perfect execution of its LNG projects, including those in Angola, Wheatstone and Gorgon, where there is high technical risk.
The EPS estimates for 2015, 2016 and 2017 have been lowered from $4.72, $5.89 and $7.38 to $4.62, $5.74 and $7.23.
Latest Ratings for CVX
|Dec 2016||Independent Research||Upgrades||Hold||Buy|
|Nov 2016||Morgan Stanley||Upgrades||Equal-Weight||Overweight|
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