10 Best Undervalued Stocks to Buy Right Now

5) Chevron Corporation (NYSE:CVX)

Forward P/E Ratio as of 8 November: 12.9x        

Number of Hedge Fund Holders: 64

Chevron Corporation (NYSE:CVX) is engaged in integrated energy and chemicals operations in the US and internationally.

Wall Street analysts are optimistic about Chevron Corporation (NYSE:CVX)’s long-term growth prospects. This optimism stems from its strong operational execution throughout its upstream portfolio, which includes the Permian Basin, the DJ Basin, the Tengizchevroil (TCO) project, and the Gulf of Mexico (GOM). Experts believe that these assets are being advanced toward FCF generation. Apart from the Permian progress, the TCO project remains on schedule to start operations in H1 2025, which should enhance Chevron Corporation (NYSE:CVX)’s cash contributions.

Chevron Corporation (NYSE:CVX) has been implementing several strategic initiatives, which are targeted at improving its competitive position. For example, the company’s shift towards “Free Cash Flow (FCF) harvesting mode” throughout its core assets should act as a tailwind. This pivot focuses on structural cost savings and spending rationalization. Therefore, analysts expect Chevron Corporation (NYSE:CVX)’s financial flexibility to enhance, which can potentially lead to higher returns for shareholders.

Furthermore, the company is well-placed to ramp up its exploration activities, with a notable well in Guyana anticipated to begin operations in early 2025. This expansion of exploration efforts reflects Chevron Corporation (NYSE:CVX)’s commitment to long-term growth and confidence in tapping new resource opportunities.

Analysts at Barclays upped their target price on the shares of Chevron Corporation (NYSE:CVX) from $168.00 to $174.00, giving it an “Overweight” rating on 4^th November. Carillon Tower Advisers, an investment management company, released its Q4 2023 investor letter. Here is what the fund said:

“Chevron Corporation (NYSE:CVX) traded lower, along with oil prices, and issued a disappointing earnings announcement due to overseas refining losses. Separately, the company announced an agreement to buy another energy company with operations offshore of Guyana, as well as in North Dakota, the Gulf of Mexico, and the Gulf of Thailand. This is a strategic acquisition for very little takeout premium.”