Chevron (CVX) Soars 5.1%: Is Further Upside Left in the Stock?

Chevron (CVX) shares ended the last trading session 5.1% higher at $163.85. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 3.9% gain over the past four weeks.

Chevron Corporation’s shares jumped on Monday, driven by optimism that recent U.S. actions involving Venezuela’s President Nicolás Maduro could open the door for expanded operations in the oil-rich nation. As the only major U.S. oil company still active in Venezuela after years of strained bilateral relations, Chevron is seen as uniquely positioned to capitalize on any easing of restrictions. The company has retained a U.S. Office of Foreign Assets Control license since 2022, allowing it to produce and export crude from existing assets, with current output of about 200,000 bbl/day from its Venezuelan joint ventures. Sentiment was further boosted after Donald Trump publicly called on U.S. oil companies to invest heavily in restoring Venezuela’s oil infrastructure, stressing that American firms should lead the effort. Reinforcing the positive outlook, several investment banks raised their price targets and ratings on Chevron, helping propel the stock higher.

This oil company is expected to post quarterly earnings of $1.54 per share in its upcoming report, which represents a year-over-year change of -25.2%. Revenues are expected to be $53.61 billion, up 2.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Chevron, the consensus EPS estimate for the quarter has been revised 7.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on CVX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Chevron belongs to the Zacks Oil and Gas - Integrated - International industry. Another stock from the same industry, Petrobras (PBR), closed the last trading session 1.5% lower at $11.74. Over the past month, PBR has returned -1.7%.

Petrobras' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.52. Compared to the company's year-ago EPS, this represents a change of +6.1%. Petrobras currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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