Chevron Corporation (NYSE: CVX) is expected to generate free cash flow of around $1.3 billion in 2020 and $10.1 billion in 2021, and its "preserved financial capacity" is a "significant strategic advantage," according to MKM Partners.The Chevron Analyst: John Gerdes initiated coverage of Chevron with a Buy rating and $121 price target. The Chevron Takeaways: Between 2022 and 2025, the company could generate about 3% compounded annual growth in its cash flow per share and around 12% average annual free cash flow yield, Gerdes said in a Wednesday initiation note. "As a consequence of a 65%-70% higher cash operating margin and competitive equity production-normalized capital intensity, Chevron's full-cycle return of 190%-195% is significantly above the industry median of 125%," the analyst said. Chevron is acquiring Noble Energy, Inc. (NASDAQ: NBL) in an all-stock transaction.The acquisition, which is expected to close in early October, "provides complementary assets in the Delaware Basin and internationally, while establishing a leasehold in the DJ Basin," he said. MKM expects Chevron to achieve around $300 million in pre-tax annual acquisition synergies, or about $2.7 billion of incremental value.CVZ Price Action: Shares of Chevron had slipped 0.50% to $71.59 at the time of publication Thursday.Photo by Buhler013 via Wikimedia. Latest Ratings for CVX DateFirmActionFromTo Sep 2020MKM PartnersInitiates Coverage OnBuy Sep 2020ScotiaBankDowngradesSector OutperformSector Perform Aug 2020Morgan StanleyMaintainsOverweight View More Analyst Ratings for CVX View the Latest Analyst RatingsSee more from Benzinga * BMO Upgrades Hasbro On Toy Industry Performance * Coronavirus Travel Worries Are Turning This American Express Analyst Bearish * Facebook Analyst Expects 'Pragmatic' Solution To EU Data Transfer Challenges(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
