Goldman adds Chevron to Americas Conviction List after YTD underperformance
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Chevron (NYSE:CVX) was added Tuesday to Goldman Sachs' Americas Conviction List for August as a "leading capital returns story supported by a clear cash flow inflection in 2024 and more volumes in 2025."
Chevron (CVX), which Goldman upgraded to Buy just yesterday, likely will generate negative net cash in 2024, but analyst Neil Mehta expects it will produce positive net cash in 2025-26 as new projects come online and existing projects continue to ramp up.
The stock has underperformed its U.S. oil major peers and the broader energy sector over the past 12 months and now looks cheap relative to peer, suggesting there is more skepticism in the stock near term, which Mehta thinks means the "discovery value" could be powerful over the coming quarters.
Goldman also added Macy's to the Americas Conviction List, touting the retailer's focus on "profitable growth."
Baker Hughes (BKR) was removed from the list after rising 13% in July as its operational turnaround is taking shape, driving improvement potential in EBITDA margins and free cash flow conversion.
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Financial and valuation comparison to sector peers
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Stock price return: Down 6% YTD, up 1.5% in the past 12 months