Chevron Corp (NYSE: CVX) has lagged its larger rival Exxon Mobil Corp (NYSE: XOM) in the stock market this year by 23%. But Hightower’s Stephanie Link still likes it more than Exxon.
Link defends her pick on CNBC’s “Halftime Report”
On CNBC’s “Halftime Report”, Link, who owns CVX, agreed that Exxon has performed better in 2021 but said it only meant there’s more room for upside in Chevron. Stating other reasons why she likes CVX more, she said:
They have stronger fundamentals and much better execution. They’ve done a great job in terms of asset sales and M&A. Their free cash flow yield on 2022 numbers stand at 10%. They could double the dividend next year alone.
According to Link, Chevron is trading at a discount compared to Exxon that makes it a better buy at the moment. Her outlook matches Jim Cramer’s, who said Chevron was a “growth stock people should own” after the oil giant reported market-beating results for Q3 last week.
Truist Financial: Exxon shares could drop to $50
Truist’s Neal Dingmann seems to agree with Link as well. The analyst downgraded Exxon to “sell” on Tuesday with a price target of $50 that represents an over 20% downside from here. Dingmann previously had a PT of $66 on the stock.
In a research note this morning, Dingmann said Exxon has committed to returning more to its investors, but shareholders of its closest peers are still getting better returns on a per-share basis. He’s also not convinced that the oil giant is doing enough to transition into clean energy.
Last week, Exxon Mobil announced plans of buying back roughly $10 billion worth of its stock over the next two years as its income and revenue topped Wall Street estimates in the fiscal third quarter.
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