Chevron shares close lower on Tuesday, company plans $80 billion in shareholder returns by 2024

Chevron Corp (CVX) said on Tuesday that it expected to return $80 billion to shareholders over a five-year period “through disciplined capital spending, improved cost efficiency and continued cash flow growth.”

Chevron shares closed lower for the eighth time in the past ten trading sessions in New York on Tuesday. It has also been the steepest single-session loss since February 27th. The stock went down 2.28% ($2.20) to $94.39, after touching an intraday high at $98.30, or a price level not seen since February 26th ($101.61).

Shares of Chevron Corp have retreated 21.67% so far in 2020 compared with a 7.04% loss for the benchmark index, S&P 500 (SPX).

In 2019, Chevron’s stock went up 10.77%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.

The oil major also projects a 9% compound annual increase in adjusted operating cash flow through 2024.

At the same time, annual capital spending is expected to be within the range of $19 billion to $22 billion over the same period.

“We remain focused on a returns-driven approach to capital allocation, investing in lower-risk projects that should drive solid earnings and cash flow growth. As a result, we expect return on capital to exceed 10 percent by 2024 at flat $60 Brent nominal prices, an improvement of over 300 basis points,” Pierre Breber, Chevron’s Chief Financial Officer, said in a press release.

“This performance is supported by an unmatched balance sheet and the lowest dividend breakeven among our peers,” Breber added.

Analyst stock price forecast and recommendation

According to CNN Money, the 21 analysts, offering 12-month forecasts regarding Chevron Corp’s stock price, have a median target of $130.00, with a high estimate of $151.00 and a low estimate of $100.00. The median estimate represents a 37.73% upside compared to the closing price of $94.39 on March 3rd.

The same media also reported that at least 16 out of 23 surveyed investment analysts had rated Chevron Corp’s stock as “Buy”, while 4 – as “Hold”.