Chevron (CVX) Stock Slipping Amid Lower Oil Prices

NEW YORK (TheStreet) -- Shares of Chevron Corp. (CVX) are down by 1.32% to $97.30 in late morning trading on Monday, as declining oil prices push some energy and related stocks into the red today.

The commodity is falling following the latest development regarding the Greek debt crisis.

Crude oil (WTI) is slipping by 2.10% to $58.38 per barrel and Brent crude is retreating by 2.29% to $61.81 per barrel this morning, according to the CNBC.com index.

On Monday, Greece announced it has closed it banks until July 6 and issued capital controls, which has caused investors to run from risky assets and also weakened the outlook for demand, Reuters reports.

"This may be the time when we break lower and into the $50s for Brent as we have a full week of uncertainty," SEB head of commodity analysis Bjarne Schieldrop told Reuters.

Greece and its international creditors were holding talks on Saturday as part of a last minute effort to keep the country from defaulting by agreeing to a number of reforms. The discussions were interrupted when Greece's Prime Minister Alexis Tsipras announced he is calling for a referendum on July 5.

The referendum is essentially a vote on measures its creditors have demanded in return for more bailout funds, The Wall Street Journal reports.

Chevron is a San Ramon, CA.-based crude oil and natural gas explorer, developer and producer.

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 reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

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

  • CVX's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 37.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 43.1% when compared to the same quarter one year ago, falling from $4,512.00 million to $2,567.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: CVX Ratings Report

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