Mizuho analysts upgraded Chevron (NYSE:CVX) to Buy from Neutral in a note to clients on Wednesday.
The analysts said in their US oil & gas review note that the firm is still constructive on exploration and production firms within the sector.
"U.S. Oil & Gas has outperformed the S&P500 by ~13% since June 25," they said. "Although higher commodity prices and an improving macro outlook certainly helped, there are some secular tailwinds for the Energy sector that give more confidence in longer-term cash generation (and cash returns) and keep us still constructive on our coverage, particularly U.S. E&Ps."
"Near-term margins for Refiners are strong, and our 3Q23 EBITDA estimates are ~59% higher than current consensus," they added.
Mizuho is increasing its 2H23 Brent outlook by ~5% and 2024/25 outlook for global oil prices by ~3% each.
CVX shares are up more than 1% at the time of writing Wednesday, trading around the $161.15 per share mark.