20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
With crude oil prices recently edging toward $80 a barrel investors may be wondering if it's time to buy Chevron (CVX) or Exxon Mobil (XOM) stock before their first-quarter earnings reports on Friday, April 28.
The two oil giants have the ability to profit immensely from higher oil prices which can typically rise ahead of the summer months as energy usage increases along with travel.
With that being said, let's see what's in store for Chevron and Exxon stock ahead of their Q1 Results.
Image Source: Bloomberg
Recent Performance & Valuation
Chevron and Exxon are two of the largest integrated oil and gas companies in the world and looking at the recent performance in their stocks and current price-to-earnings valuation can help gauge if there is more upside before we dive into their outlooks.
In this regard, Exxon stock is up +6% year to date to top Chevron's -6% but both oil giants have trailed the S&P 500's +8%. However, over the last two years, Exxon is still up +109% with Chevron up +66% to crush the benchmark as oil prices and other commodities soared amid rising inflation.
Image Source: Zacks Investment Research
Chevron and Exxon stock both trade at 11.9X forward earnings which is nicely beneath the S&P 500's 19.2X but above the industry average of 5.7X.
Still, Chevron and Exxon are global energy leaders and trade attractively relative to their past. To that point, both stocks trade well below absurd decade-long highs and offer a 33% discount to their respective medians of around 17.7X.
Chevron Q1 Preview
Chevron's first-quarter earnings are expected to be virtually flat year over year at $3.36 per share. Sales for Q1 are projected to decline -12% YoY to $47.64 billion. Notably, the Zacks Expected Surprise Prediction (AMEX:ESP) indicates that Chevron could slightly top its Q1 earnings expectations with the Most Accurate Estimate having EPS at $3.38 per share and slightly above the Zacks Consensus.
Image Source: Zacks Investment Research
Annual earnings are now expected to drop -23% this year at $14.39 per share after a tough-to-compete-against year with EPS at $18.83 in 2022. Fiscal 2024 earnings are expected to stabilize and rise 7%. Total sales are forecasted to be down -15% this year and then rise 4% in FY24 at $215.69 billion
Exxon Q1 Preview
Pivoting to Exxon, Q1 earnings are projected to jump 28% at $2.65 per share compared to EPS of $2.07 in the prior-year quarter. First-quarter sales are expected to rise 6% YoY to $96.04 billion. The Zacks ESP indicates Exxon could also beat its Q1 earnings expectations with the Most Accurate Estimate having EPS at $2.67.
Image Source: Zacks Investment Research
Overall, annual earnings are still expected to drop -29% this year at $9.90 per share as Exxon is also up against a tough-to-follow year with 2022 EPS at $14.06. Fiscal 2024 earnings are expected to be virtually flat. On the top line, FY23 sales are now forecasted to drop -10% and then stabilize and rise 1% in FY24 at $378.50 billion.
Takeaway
Chevron and Exxon stock both land a Zacks Rank #3 (Hold) leading up to their first quarter results. Despite the expected dip in their annual top and bottom lines these oil giants still trade attractively relative to their past and offer solid dividend yields above 3%.
Plus, crude oil prices are largely up over the last month but more upside in Chevron and Exxon stock will depend on their ability to capitalize on this and offer better-than-expected guidance during their Q1 reports.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It's a little-known chemical company that's up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Zacks Investment Research
Image by Patrick Hendry on Unsplash
20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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