Chevron Is Crushing It and for My Portfolio As well: Here is the Trade

You realized massive numbers ended up coming.

On Wednesday, energy large and Sarge fave Chevron Corp.  (CVX) introduced a 6.3% dividend increase and a new authorization for a $75B share repurchase software that will go into impact on April 1st soon after the current $25B authorization expires.

Chevron introduced its fourth-quarter economic benefits on Friday early morning. What a quarter! What a 12 months! Nevertheless, there was some disappointment.

For the three months finished December 31, Chevron posted modified EPS of $4.09 (GAAP EPS: $3.33) on revenue of $56.473B. The modified earnings print fell shorter of consensus as the agency wrote off $1.1B in intercontinental upstream write-off and impairment rates. The earnings print was good more than enough for 12 months in excess of yr growth of 17.3%.

Even so, internet cash flow of $6.353B increased 25.7% from the yr in the past comp. For the full yr 2022, Chevron posted net revenue of $35.465B, a variety that simply beat the firm’s former history 12 months of 2011, and was up 127% from total yr 2021.

Earnings Breakdown

Upstream drove earnings of $5.485B for Q4 2022 (+6.4%), and $30.284B for FY 2022 (+91.5%).

– US Upstream posted Q4 earnings of $2.618B (-11.9%).

– Worldwide Upstream posted Q4 earnings of $2.867B (+31.2%)

Downstream drove earnings of $1.771B for Q4 2022 (+133%), and $8.155B for FY 2022 (+179.9%).

– US Downstream posted Q4 earnings of $1.18B (+78.8%).

– Global Downstream posted Q4 earnings of $591M (+491%).

– Other functions drove cash flow/loss of $-903M for Q4 and $-2.974B for FY 2022.

– Exchange fees acted as a $-405M headwind for Q4 2022, but a $669M tailwind for FY 2022.

Fundamentals

Operating income move amounted to $12.5B for the quarter and $49.6B for the year, which was a company file. Draw from that Q4 cash expenses of $3.8B and FY 2022 capital expenses of $8.1B, and we get to no cost funds circulation of $8.7B for the quarter and $37.6B for the comprehensive 12 months, which is also a file. This is also why the company is hurrying to return extra money to shareholders.

Turning to what balance sheet data is offered as I do not nonetheless see a Kind 10-Q for the quarter just however, and Chevron has submitted that type times after releasing their quarterly push release in the past, the company ended the period noted with a internet income placement of $17.901B, bringing overall property to $237.709B (+7.6%), as complete personal debt has been diminished to $23.339B (-25.6%). It is challenging to evaluate the firm’s harmony sheet without having the ability to determine out my ratios, but with what I do have, hard cash up, personal debt down… looks like a superior start out.

My Ideas

Chevron is crushing it.

I see the stock offering back almost 3% this early morning following attaining just about 5% on Thursday. Substantially of this is probable income-getting as record earnings, file running money circulation and document free funds stream really don’t depart several other reasons to exit the inventory. Unless a person thinks that the Biden administration will try to get in the way of profitability in this place as they have performed prior to.

I see it this way. This is a single of my additional prosperous positions. In reality, outside of my defense contractors, it would be range two.

Am I having gains today? I do not assume so. I do feel I see a recession coming and I do not be expecting huge oil to do nicely in a economic downturn. That explained, the time is just not ideal still.

Readers will see that CVX broke out of a double base with a $166 pivot back in October. Due to the fact then, as the shares have consolidated, they have crafted an ascending triangle, which is a bullish pattern of continuance with a $189 pivot that came shut to remaining tested. Relative power is high-quality.

The daily Moving Common Convergence Divergence (MACD) is in good enough condition. My prepare is to increase down to the 21-working day EMA (exponential relocating common) ($178). Offered a further operate at pivot, my goal price is $217, which may be a Wall Street large.

I do see UBS five-star analyst Jon Rigby and Raymond James five-star analyst Justin Jenkins, who each have $215 goal selling prices, so at the very least I know that I am in pretty superior organization.