Chevron Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that Chevron Corporation (NYSE:CVX) filed its second-quarter result this time last week. The early response was not positive, with shares down 5.1% to US$149 in the past week. Revenues were in line with forecasts, at US$51b, although statutory earnings per share came in 16% below what the analysts expected, at US$2.43 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Chevron

Taking into account the latest results, Chevron's 19 analysts currently expect revenues in 2024 to be US$198.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 9.5% to US$11.12. In the lead-up to this report, the analysts had been modelling revenues of US$199.5b and earnings per share (EPS) of US$12.33 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$181, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Chevron at US$205 per share, while the most bearish prices it at US$154. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Chevron's revenue growth is expected to slow, with the forecast 3.4% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.9% per year. So it's pretty clear that, while Chevron's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Chevron. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Chevron analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Chevron has 2 warning signs we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com