Chevron (CVX) Stock Slipping on Oil Price Decline

Chevron (CVX) stock is down on Friday as oil prices continue their downturn.
By Amanda Albright ,

NEW YORK (TheStreet) -- Chevron  (CVX) - Get Report stock closed down by 0.53% to $94.03 on Friday afternoon, as the decline in oil prices hurt some energy and related stocks today.

WTI Crude is down by 1.64% to $44.46 per barrel, while Brent crude is lower by 0.88% to $47.56 per barrel late this afternoon, according to the CNBC.com index.

A global oversupply in oil has caused the price of a barrel to remain below $50 for weeks, the Wall Street Journal reports. 

"Throw in the likelihood of a stronger dollar as a result of a Federal Reserve interest rate increase in December and the first half of next year looks like a distinctly dangerous period for oil bulls," David Hufton of PVM brokerage, told the Journal.

The San Ramon, CA-based company operates an upstream and downstream oil business.

Separately, TheStreet Ratings team rates CHEVRON CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CHEVRON CORP (CVX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CVX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • CVX, with its decline in revenue, slightly underperformed the industry average of 37.0%. Since the same quarter one year prior, revenues fell by 37.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $5,360.00 million or 38.24% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CVX

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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