Chevron Plans Buyback Resumption – Analyst Blog

Following a hiatus of nearly two years, energy major Chevron Corp. (CVX) yesterday announced plans to restart quarterly buybacks of up to $1 billion of its common stock starting from the fourth quarter of 2010. The oil and gas producer is targeting a quarterly repurchase rate of $500 million to $1 billion as part of a program earlier approved by the Board of Directors.  

 
Chevron, which is slated to report its third-quarter results on October 29, has bolstered its cash flows in recent times on the back of the company’s ongoing capital discipline and impressive returns from newly developed projects. We believe that the resumption of the buyback program not only highlights the company’s commitment to create value for shareholders but also underlines the oil giant’s confidence on commodity prices.
 
The second-largest U.S. oil company by market value after ExxonMobil Corp. (XOM) is in good shape financially with enough cash flow in its kitty to support capital spending and dividend, as well as return cash back to shareholders.
 
San Ramon, California-based Chevron is one of the largest publicly traded oil and gas firms in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.
 
Chevron shares currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.