Chevron Just Hit a Record High. Is the Stock Still a Buy?

Chevron reached a record high on October 14, closing at $222.04, and as of now, the stock is trading around $221.04. Over the past year, the company's shares have soared 45%, significantly outpacing the overall market. This has led investors to question whether the stock's impressive performance is solely due to soaring oil prices, which are expected to eventually decrease, or if Chevron represents a promising long-term investment.

Oil prices have indeed risen, with Brent crude currently trading at $106 per barrel, a 46% increase since the start of the conflict in the Persian Gulf. However, Chevron's growth prospects extend beyond the oil price surge. The company is set to gain control of over 65 billion barrels of Venezuela's proven oil reserves through a deal with President Trump.

Additionally, Chevron is expanding its operations in the Eastern Mediterranean, including recent agreements for seismic research in Greek waters. This move strengthens the company's strategy to capitalize on the growing demand for natural gas in the region. Furthermore, a global shortage of refining capacity is expected to persist, benefiting Chevron, which has the ability to refine Venezuela's heavy, sour crude.

In the second quarter, Chevron reported a net income of $12.1 billion, a nearly 400% increase from the same period last year, driven by strong U.S. and global production. This surpassed analysts' earnings expectations by $0.50 per share, bringing the company's earnings to $6.06, its highest in six years. With more positive results anticipated, including its third-quarter report on October 30, Chevron appears to be a worthwhile long-term buy.

Twenty out of the 25 analysts covering the stock have rated it as a Buy or Strong Buy, indicating confidence in the company's growth potential.