Sign InChevron Corporation (CVX) Hits Lowest Closing Price in a Year, Potential for Rebound
Summary
Chevron Corporation (CVX) closed at $142.4 on November 08, 2023, with a 1.39% decline, and despite being in the oversold territory, it is considered a 'Buy' due to the anticipation of a rebound based on its healthy balance sheet and strong market standing.
Overview of Chevron Corporation (CVX)
Chevron Corporation (CVX) closed at $142.4 on November 08, 2023. The stock depreciated by 1.39%, equivalent to a $2.01 drop from the previous trading session. The $1.39% decline placed the stock price between the day's high and low of $144.65 and $142.25, respectively. It's understood that the day's price range was relatively narrow, which may suggest uncertainty among investors. Importantly, the closing price is the lowest for the past year, well below the year's peak of $189.68.
Stock Performance & Market Activity
The trading volume recorded on the last trading day was approximately 12.52 million, which is higher than the average volume of 8.64 million. Such a spike in volume typically signifies heightened interest in the stock. However, increased trading activity coupled with a declining price might reveal a negative market sentiment towards CVX.
Chevron has a notable market capitalization of $268.00 billion, implying it holds a significant place in the industry. Its 14-day Relative Strength Index (RSI) of 16 indicates that the stock has entered into the oversold territory. At this level, a potential reversal or bounce-back may be imminent.
Technical Indicators
From a technical standpoint, Chevron is currently trading significantly below its 50-day moving average ($161.97) and 200-day moving average ($161.54) indicating a bearish market sentiment. Adding to this, the negative MACD of -5.70 signals a downward trend. However, with no support level in sight, the stock could face further downward pressure. The resistance level currently stands at $144.35.
Fundamental Analysis
Chevron reflection on the fundamentals shows it has a healthy earnings per share (EPS) of $13.48, valuing it at a relatively low price-to-earnings (PE) ratio of 10.56. This suggests that investors currently pay less for each unit of earnings, indicating the stock may be undervalued. Furthermore, the discounted cash flow (DCF) is assessed at $151.64, which is more than the current trading price, indicating an inherent value in the stock.
Analyst Predictions & Recent News
Analysts forecast a top-end target of $212 and a lower-end target of $120, with an average consensus target of $173.67. Of these analysts, 21 recommend buying, 3 holding, and 1 selling, pointing towards generally favorable views on CVX. Several recent updates highlighted Chevron's strong balance sheet and growth potential despite a drop in oil prices. One specific piece of news mentions an upgrade in Chevron's rating due to the acquisition of another oil company, Hess.
Conclusion
Given the technical analysis showing the stock in oversold territory and the fundamental analysis that the stock may be undervalued, it seems reasonable to categorize Chevron Corporation (CVX) as a 'Buy.' However, this recommendation is based on the anticipation that the stock will rebound from its current position thanks to its healthy balance sheet and strong market standing. Investors are nevertheless advised to monitor the situation carefully, as the stock is currently experiencing a downward trend.
