BUZZ-Street View: Chevron's free cash flow to rise

Chevron CVX.N reported fourth-quarter earnings below Wall Street estimates on Friday as weak margins dragged its refining business into a loss for the first time since 2020

In 2023, oil and gas producer Hess agreed to sell itself to Chevron for $53 billion in stock, but the deal has run into legal trouble

Median PT of 25 brokerages covering the stock is $175.50 - data compiled by LSEG

STRONG KEY ASSETS

Morgan Stanley says performance of key assets (Permian and TCO) remains strong
Forecasts ~8% FCF (free cash flow) yield in 2025, rising to ~10% in 2026

BofA Global Research ("buy," PO: $180) says new production at TCO, progress in the Gulf of America, growth in the Permian Basin and cost-cutting should drive $10 billion of annual FCF by 2026

Wolfe Research ("peer perform,") says "the big story is whether Hess can close; but a success case is not a panacea for a re-rating, but can help long-term dividend visibility"

Morningstar (fair value: $176) says management has a strong track record, and expects it to address lagging returns
"Production growth of 6% per year through 2026 is robust, but growth beyond that is uncertain. The acquisition of

Hess will help address these issues, but it is also uncertain," brokerage says