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RBC Capital Markets thinks oil giant Chevron can thrive in an increasingly unstable macroeconomic environment. The bank upgraded Chevron stock to outperform from sector perform on Thursday. It also raised its price target to $180 price target from $165, implying upside of 19.5% from Wednesday’s close. RBC analyst Biraj Borkhataria thinks Chevron’s has managed its balance sheet conservatively in the past, which has helped the company sustain its dividend yield as well as acquire companies successfully. On May 22 , it agreed to buy PDC Energy . These factors underpin Chevron’s ability to surpass peers in a challenging market. CVX YTD mountain Chevron stock has pulled back more than 16% from the start of 2023. “Looking forward, we believe the macro environment is likely to remain volatile, however weaker end product demand and OPEC+ managing the oil market leaves CVX’s upstream heavy weighting well-placed,” Borkhataria said. “This combined with its fortress balance sheet and commitment to remaining disciplined through organic and inorganic activity should prove defensive over time.” Chevron shares have struggled this year, losing more than 16%. Still, Chevron’s discipline when it comes to mergers and acquisitions gives RBC more confidence that the company isn’t only buying company’s out of necessity and is instead making prudent moves. “In our view, the company’s ability to execute on this front has been impressive, and importantly, it is both about what the company has done, and what it has chosen not to do,” Borkhataria said. RBC isn’t the only firm getting bullish on Chevron. Last month, HSBC upgraded the oil giant to buy from hold, noting the stock’s recent drop has created a buying opportunity . — CNBC’s Michael Bloom contributed to this report.
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