Chevron's Wild Week: Charting The Stock's Ride On Dividend, Buyback News — And Q4 Earnings Miss

If a company offers up some good news the day ahead of an earnings announcement, it has to seem a bit fishy.

In other words, why not wait until the following day to alert investors of the planned announcement (earnings) and the other unknown news? Unless, of course, the company is anticipating a negative reaction to the earnings report.

This is the scenario investors in Chevron Corporation CVX were confronted with on Friday, making it the PreMarket Prep Stock of the Day.

Buy, Buy, Buy: After the closing bell on Wednesday, Chevron raised its quarterly dividend from $1.42 To $1.51/share. In addition, the company announced a robust $75-billion stock repurchase program.

As expected, that instigated a monster rally in the issue in Thursday’s session. The high for the day came close its all-time high ($189.68), reaching $187.81.

Chevron came much closer to making a new all-time closing high, coming up just shy ($187.79 vs. $188.05). The rally took place on over double its volume from Wednesday (14.3 million vs. 6.72 million).

Related Link: Has $1,000 In Chevron Stock Been A Blowout For Investors Since Joe Biden Was Elected?

Chevron's Mixed Q4 Report: Before the opening on Friday, the company announced fourth-quarter adjusted EPS of $4.09, which missed the $4.38 estimate, and sales of $56.47 billion against a $54.63-billion estimate.

Another positive from the report: Chevron improved fourth-quarter operating cash flow to $12.5 billion of free cash flow, up from $8.7 billion. 

PreMarket Prep's Take: When the issue was being covered on the show Friday it was already trading the red by over $2 at the $185 area.

Co-host Dennis Dick was perplexed by the two-day saga.

“Don’t you find it incredibly shocking the company raised its dividend and announces a huge buyback one day and then the next day misses on EPS?”

The author of this article was skeptical the issue could match Thursday’s performance. Investors were cautioned that if Thursday’s low was breached ($183.48), the issue could easily fill the void in price from Thursday’s session.

In other words, Chevron could come down to the top of Wednesday’s range to $180.13.

CVX Price Action: The opening tick ($184.23) turned out to be the exact high for the session. The ensuing decline easily filled the gap, with Chevron falling to $177.92 and staging a comeback.

The stock closed at $179.45, down 4.44%. 

The discussion on Chevron from Friday’s show can be found here:

Photo via Shutterstock.