What makes Chevron’s (CVX, $121.90) acquisition of Anadarko (APC, $64.06) worthy?
Chevron’s primary purpose in paying $50 billion to acquire Anadarko is to boost its upstream oil and gas business, especially in the fast-growing Permian Basin. However, the deal has the bonus of bolstering the company’s midstream operations, which many investors are probably overlooking.
Although Chevron is more popular for its upstream production business and downstream retail operations, few are familiar with the company’s midstream operations of Chevron Pipeline Company. Operating about 3,000 miles of pipelines, this midstream entity is responsible for transporting more than 1.2 million barrels of oil, refined products, and chemicals each day. With a storage capacity of about 2.6 million barrels of products, these assets help Chevron’s upstream and downstream operations by moving hydrocarbons from production basins to end users.
Anadarko, with its 55% stake in Western Midstream, has highlighted these assets over the years leading the company to form a master limited partnership (MLP) more than a decade ago to drive midstream growth. Currently, Western Midstream owns interests in more than 12,700 miles of pipelines in the Rockies, Texas, New Mexico, and Pennsylvania sending more than 80% of its revenue to investors, Anadarko being the biggest among them.
If Chevron assumes Anadarko’s 55% stake in Western Midstream, the company will enjoy a steady cash flow via the MLP distribution, footprint in the fast-growing Permian Basin, like ExxonMobil support several midstream companies to build out oil and natural gas pipelines, and finally using Western Midstream as a funding vehicle.
Overall, Chevron’s future looks promising and the acquisition, if successful, will create significant value for the investors in the coming years.
CVX's RSI Indicator ascending out of oversold territory
The RSI Indicator for CVX moved out of oversold territory on April 16, 2025. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 21 similar instances when the indicator left oversold territory. In of the 21 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 57 cases where CVX's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 12, 2025. You may want to consider a long position or call options on CVX as a result. In of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for CVX just turned positive on April 25, 2025. Looking at past instances where CVX's MACD turned positive, the stock continued to rise in of 49 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CVX advanced for three days, in of 362 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The 50-day moving average for CVX moved below the 200-day moving average on May 12, 2025. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CVX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
CVX broke above its upper Bollinger Band on May 12, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 51, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. CVX’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.836) is normal, around the industry mean (1.194). P/E Ratio (14.004) is within average values for comparable stocks, (24.146). Projected Growth (PEG Ratio) (4.497) is also within normal values, averaging (4.841). Dividend Yield (0.039) settles around the average of (0.111) among similar stocks. P/S Ratio (1.519) is also within normal values, averaging (0.975).
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General Information
a company which explores and refines oil and natural gas
Industry IntegratedOil