Chevron Corp.’s stock gained 0.5% in morning trade Friday, while the energy sector and broader market declined, after the oil giant was upgraded at J.P. Morgan, which said the share price already reflects investor concerns. Analyst Phil Gresh raised his rating to overweight, after being at neutral since July 2012. He cut his stock price target to $86, which is 13% above current levels, from $90. The stock has tumbled 25% over the past three months, while the SPDR Energy ETF has dropped 19% and the Dow Jones Industrial Average has lost 9.7%. Among the reasons Gresh said he believes Chevron’s stock will start to outperform, recent investor concerns of a dividend cut are unfounded, sell-side sentiment is at a decade low, project execution issues are now well understood and appropriately discounted, that balance sheet remains “top tier” and free cash flow should start improving. He said the stock’s recent weakness “gives investors a chance to buy the stock at trough-like fundamentals and sentiment, with an opportunity to claw back relative underperformance over time.”
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News