- Chevron (CVX +0.4%) has come through the worst of its trials and looks like a solid investment relative to other oil majors, especially Exxon Mobil (XOM -0.1%), as CEO John Watson reportedly prepares to leave the company.
- All the oil majors are reducing their breakeven oil price, but Bloomberg's Liam Denning writes that CVX is different in that it should enjoy production growth of ~5% per year at least through the end of the decade as it has brought giant projects onstream, and "now gets to enjoy rising production and lower spending, portending an increase in both free cash flow and go-forward return on capital."
- XOM's lack of growth and doubts about its long-term project pipeline due to Russian sanctions "make it tough to come up with a compelling buy case beyond the traditional defensive one - and even that has been dented in the past year or so," says Denning, which has allowed CVX's relative valuation gap to rise to the narrowest ever during Watson's tenure as CEO.
- "All in all, then, Watson's successor would be assuming control at a relatively good time" for CVX, Denning concludes.
- Now read: Exxon Mobil Positioned To Improve In Any Market Environment
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Denning: Chevron in relatively strong shape as Watson prepares to leave
Published 08/23/2017, 10:43 AM
Denning: Chevron in relatively strong shape as Watson prepares to leave
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