Chevron shares rose approximately 1.32% in late trading Tuesday to $196.90, positioning the stock for a seventh consecutive session of gains, marking its longest winning streak in recent times. Over this period, the stock has advanced about 5.2%, significantly outperforming the S&P 500 index, which declined 0.13% over the same timeframe.
Geopolitical and Dividend Factors Provide Dual Support The recent rally is driven by multiple factors. Firstly, recent tensions between the United States and Venezuela have drawn attention in the energy markets, with expectations that geopolitical risks could push oil prices higher, providing support for energy stocks. Additionally, Chevron went ex-dividend on Tuesday, with the previously announced quarterly dividend of $1.78 per share taking effect. This dividend is scheduled for payment on June 10, offering an annualized yield of approximately 3.7%, which has attracted income-seeking investors.
Fundamental and Technical Strength Align From a fundamental perspective, Chevron's first-quarter earnings report, released in early May, showed adjusted earnings per share of $1.41, surpassing analyst expectations of $1.00. Although revenue was slightly below expectations, the better-than-expected profit performance has bolstered market confidence. On the technical front, the stock is currently trading above its 50-day moving average of approximately $193.14 and its 200-day moving average of around $173.38, maintaining medium- and long-term bullish momentum. Analysts anticipate the next resistance level to be near $200.67.
Institutional Views Remain Mixed It is noteworthy that not all investors are optimistic. Berkshire Hathaway, led by Warren Buffett, reduced its Chevron holdings by about one-third in the first quarter, realizing proceeds of approximately $8 billion. However, overall, Chevron continues to receive favorable ratings from the majority of analysts, with 18 firms assigning a "buy" rating and a consensus price target of around $204.13.
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