Analyst: This Oil Stock is More Stable Than Sector Peers

Call activity is ramping up following the bull note

Assistant Editor
Nov 24, 2021 at 10:07 AM
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RBC Capital Markets upgraded Chevron Corporation (NYSE:CVX) to "outperform" from "sector perform" today, raising its price target to $145 from $130 as well. The firm noted that the blue-chip energy giant has a much more stable portfolio than its industry peers, putting the company in a good position to benefit from a strong future commodity cycle. 

The analyst joins an already bullish brokerage bunch. Coming into today, 12 of the 16 in coverage considered Chevron stock a "buy" or better, while the other four recommended a tepid "hold."

Call activity is ramping up following the upgrade. Already today, 5,411 calls have crossed the tape, which is double the amount typically seen at this point. The most popular contract is the weekly 11/26 117-strike call, followed by the weekly 12/3 120-strike call.

Speculating on Chevron stock's next move with options might be a prudent play, too, especially considering the equity's Schaeffer's Volatility Index (SVI) of 24% stands higher than just 18% of readings from the past 12 months. This means options traders are pricing in relatively low volatility expectations for CVX at the moment. 

Trading slightly higher in response to the bull note, up 0.6% at $117.20 at last check, Chevron stock is hovering near its highest level since January 2020. A pullback last week was saved by the 40-day moving average, and the stock boasts a 37.7% lead year-to-date.

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