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The energy company reported first-quarter earnings on April 27 of $6.5 billion, or $3.27 a share, up from year-earlier earnings of $6.2 billion, or $3.09.
"Our $120 target price represents an 8.9x multiple to our 2012 EPS estimate, near the lower end of its historical 8-14x range," Societe Generale analysts wrote in a May 7 report. "We expect CVX's high oil exposure, diverse business model, strong balance sheet, and dividend yield to be sought as a safe haven amid the market volatility we anticipate in 2012. That said, the heavy investment phase for its large LNG projects puts it in deficit spending territory for 2012-13 and poses the risk of cost overruns. We respect management's conservative approach, but it will limit potential for positive surprises from dividends or buybacks. Risks to our TP: Volatile wellhead, crack spreads, and product pricing can materially affect profitability. With 73% non-US exposure, geopolitics can affect bottom line results, as can proposed domestic tax changes. CVX also has several chunky deep H2O projects, which pose cost overrun risks. About half of operations are PSC exposed."
Forward Annual Dividend Yield: 3.5%