Blue-Chip Oil name announces bullish report, share buybacks


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Chevron posted better-than-expected second quarter results

Chevron Corp (NYSE: CVX) reported better-than-expected second quarter earnings of $ 1.71 ahead of the bell this morning, along with lower revenue. Additionally, the blue-chip oil name joined several of its industry peers in announcing share buybacks, as profits rose to pre-pandemic levels. According to CEO Michael Wirth, buybacks will resume this quarter at an annual rate of between $ 2 billion and $ 3 billion, about half of the annual rate expected by Chevron.

At last check, CVS is down 1.3% to trade at $ 101.26. Several short-term resistance trendlines are looming, including the 40-day moving average, which seemed to limit today’s earlier gains. Since the start of the year, shareholders’ equity is up 21.6%.

Option buyers are targeting Chevron stocks after today’s event, with calls at double what is typically the case at this point. More precisely, 10,000 calls have already crossed the band, against 3,363 puts. The most popular is the weekly 7/30 call of 103 moves, followed by the 105 move call of the same series.

This penchant for calls continues an uptrend recently in options wells. CVX 50-day call / sales volume ratio of 3.08 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is over 87% of reads of last year, showing that long calls are picked up at a clip faster than usual.

Analysts are of the same opinion. Of the 18 covered, 13 have a “buy” or better rating on fairness.

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