General presentation of the Chevron Company:
Let's start this article with a little more detailed presentation of the Chevron group. As part of your analyses of this value, you will need to know what the company's main activities are as well as its sources of income. This will allow you to better understand the challenges that the group will have to face in the years to come.
The Chevron Corporation group is an American multinational company specializing in the petroleum sector. Specifically, this company is currently one of the leading oil and gas groups across the world.
To understand what the activities of this group are precisely, it is interesting to check how its turnover is distributed between the different sections and different divisions.
Let's start by pointing out that Chevron achieves the major part of its turnover, i.e. 77.1%, through its refining and distribution activities. For these activities, the group currently owns 9 refineries which produce an average of 2.6 million barrels of products sold each day and a network of more than 12,900 service stations operated under different logos with the Chevron brand along with Texaco and Caltex, spread across the whole world. At the same time, the Chevron group is also developing oil and natural gas transport activities as well as petrochemical and plastic products production activities.
The second largest business area of the Chevron group is that of oil and natural gas exploration and production with more than 22.7% of turnover. These activities concern the production of 3.1 million barrels of crude oil per day, 1.9 million barrels of liquefied natural gas and 202.7 million m3 of natural gas per day.
It is also important to remember that the Chevron group is currently aiming to diversify its activities in other areas and in the production of electricity in particular, which today generates 0.2% of its turnover.
With regard to the geographical distribution of revenues generated by the Chevron group, more than 60.4% of its turnover before intragroup eliminations comes from international markets.
What are the strengths and weaknesses of Chevron in its market?
In order to better anticipate future variations in the Chevron share price on the stock market, it is essential to know how to determine what the strengths and weaknesses of this group are, in other words, you need to know the resources available to Chevron to develop and its weak points which could, in some cases, increase its chances of recession. Here is the detail of these strengths and weaknesses.
First of all, we'll be taking a closer look at the advantages and strengths of the Chevron group, the elements rather in favour of an increase in the growth of this group and therefore of its share price in the stock exchange. That starts with the fact that Chevron is present throughout the entire energy value chain. As a result of this extensive presence, the group responds to the various demands and needs of the market and is also able to reduce its costs because it severely limits intermediaries.
Another undeniable asset of this oil group is its development and growth strategy. In fact, Chevron often carries out strategic operations such as acquisitions of other companies aimed both at developing its presence around the world and in different markets, and also to further diversify its activities and therefore protect against the risk associated with the drop of a particular segment.
Finally, another major asset available to the Chevron group is the fact that it is present throughout the world. This strong international presence with over 60% of its income generated outside the United States is a true strength and allows it to also diversify its sources of income and protect itself against geo-economic risks.
As we mentioned above, the Chevron group also has weaknesses that you must also take into account in your analyses and which will have an influence on its ability to face certain threats and major issues in the years to come. Among the major weaknesses of this group is the fact that Chevron has been involved in natural disasters several times, particularly in Ecuador, which has contributed in tarnishing its brand image and strengthen its inspections.
We'll also point out the recent drop in sales of refined products which also leads to a significant loss of turnover while its commitment to other energies is still low.
How to perform the fundamental analysis of the Chevron share price?
Now that you have a better understanding of Chevron and its theoretical capacities to face the years to come, it is important to know how to carry out the necessary analyses of its share, the most important of which is undoubtedly fundamental analysis. For this analysis, you will need to follow some influential data.
- In particular, you should keep an eye on the planning of major investments regarding its future development, particularly the signing of agreements for the acquisition of land in order to improve its exploration and extraction activities.
- It is also important to closely follow the technological innovations that the Chevron group could develop in the future aimed at improving its production chain or reducing its costs in the face of competition.
- You must also take into account the effectiveness of the measures taken by the Chevron group with the aim of reducing its greenhouse gas emissions due to increasingly stringent environmental regulations.
- Finally, you should follow the fluctuations of the raw materials market with the evolution of the price of crude oil and natural gas, which will have a strong influence on the activities and profitability of this company.
How to set up a technical analysis of the Chevron share price?
As seen above, fundamental analysis of the Chevron share price will allow you to study and interpret the elements, events and publications that may increase or slow down the growth of this group.
But it is also essential to carry out a complete and coherent technical analysis of this stock by following the live stock charts. Different indicators should be used here, including trend and volatility indicators as well as any turning points or trend acceleration.
Make sure you adapt the periodicity of your charts according to the strategy that you plan to put in place. Among the technical indicators most used by stock market investors are the MACD, moving averages, and the Stochastic indicator, Bollinger Bands and even pivot points and support as well as technical resistance levels.