CVX - Embedded Expectations Analysis - 2019 09 20
Chevron Corporation (CVX:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Assets, with a 1.0x Uniform P/B. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about their margins, Anadarko, and their international operations.Specifically, management may be concerned about the earnings impact of their planned turnarounds, and they may be concerned about the sustainability of recent production increases in their base business. Furthermore, they may be concerned about the value of the LNG assets they acquired in the Anadarko deal, and they may lack confidence in their ability to reach their export targets in the Permian basin. Finally, they may lack confidence in their ability to return to normal strength at the 3GP site by the end of August, and they appear to have concerns about performance ex-special items during the quarter.
Chevron is engaged in energy and chemicals operations. Upstream operations consist primarily of, among others, exploring for, developing and producing crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas, storage and marketing of natural gas; and a gas-to-liquids plant. Downstream operations consist primarily of, among others, refining crude oil into petroleum products; marketing of crude oil and refined products; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives.
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