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CVX, looking very SHARP & cheap at 8 X Cashflow
Current 136 Target 184 +36%
February 6 2022
1 minute read
Sales grew 8%
Costs up profit down on higher non cash costs
Cashflow higher
Balance sheet higher leverage
Valuation, cheap, a 36% higher target price
1 minute read
Sales grew 8%
- Sales grew 8% in the fourth quarter to 48,129 million dollars & are up an amazing 91% from a year ago!
- This brings the quarterly average to 18% growth.
- We predict average growth of 6% in this next 12 months to bring sales to 135,561 million dollars in the fourth quarter of 2022.
Costs up profit down on higher non cash costs
- The cash cost ratio went from -79% to -81% profit from 6,100 to 5,100 million dollars in the fourth quarter on higher non cash costs.
- The average cost ratio is at -80% now.
- We use the average -80% cost ratio to predict a 8,141 million dollars profit in the fourth quarter of 2022.
Cashflow higher
- Free cashflow went from 6,700 to 6,900 million dollars in the fourth quarter despite higher -2,600 million dollars investment spending.
- Average quarterly Cashflow is at 5,325 million dollars now.
- We assume the same -2,600 million dollars investment spending which with higher sales gives a higher 9,266 million dollars Cashflow in the fourth quarter of 2022.
Balance sheet higher leverage
- Cash declined 5,998 to 5,640 million dollars in the fourth quarter.
- Liabilities increased 98,086 to 100,468 million dollars so net cash worsened -92,088 to -94,828 million dollars
- With our forecast cashflow & a -13,909 million dollars equity payout -18,409 million dollars liabilities payment net cash will be -76,419 million dollars in 12 months time.
Valuation, cheap, a 36% higher target price
- CVX capital paid from the last 28 quarters jumped 38,200 to 46,500 million dollars in the third quarter with -6,000 million dollars liabilities, -2,300 million dollars equity payments & will be 78,819 million dollars in12 months time.
- At the current market value of 261,900 million dollars based on our forecasts it’s cheap at 1.1 X assets with a 7 years payback & a 5% yield.
- Our cashflow forecast is 32,319 million dollars which means an 8 X valuation. An 11 X valuation gives a 36% higher target price of 184 dollars.