Analysts at Dahlman Rose reiterated its “Buy” rating on Chevron Corporation (CVX) on Wednesday following news that the supermajor oil company has agreed to some acquisitons and partnerships with a couple of pipeline and oilfield companies.
The analysts see shares of CVX reaching $120, a +10.5% upside to Monday’s closing price of $108.63.
Dahlman Rose noted, “CVX has agreed to buy a 50% interest in the proposed Kitimat LNG export terminal and its associated Pacific Trail Pipelines Project, along with stakes in two large shale gas fields in Western Canada. CVX is buying out the 30% stakes held by Encana and EOG and then selling 10% to Apache, to make CVX and APA 50-50 partners in the LNG project. The two partners will also control 644,000 acres in two gas-rich plays (Horn River and Liard Basins). CVX will operate the pipeline, LNG terminal, and market the gas to Asian buyers, with APA operating the gas drilling program. The deal is subject to regulatory reviews and is expected to close in 1Q13.The Kitimat LNG project (2 trains, 10 Mtpa capacity) is currently in the FEED (front-end engineering and design) phase with an estimated startup in 2017.”
Chevron shares were up 41 cents, or +0.38%, during morning trading on Wednesday. The stock is up +2.46% year-to-date.
The Bottom Line
Shares of Chevron (CVX) have a 3.31% dividend yield, based on Monday’s closing stock price of $108.63. The stock has technical support in the $103-$105 price area. If the shares can firm up, we see overhead resistance around the $110-$113 price levels.
Chevron Corporation (CVX) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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