This Stock Could Be a Top Performer in Its Sector By the End of 2026

Core Insights - Chevron experienced a transformational year in 2022, achieving record production levels and completing the acquisition of Hess, which contributed to a 35% increase in adjusted free cash flow despite a 15% decline in oil prices [1][2][5] - The company returned a record $27 billion to shareholders through dividends and stock repurchases [1] Production and Growth - Chevron initiated several major growth projects, including Ballymore and Whale in the Gulf of Mexico, and completed its Future Growth Project in Kazakhstan [4] - The company expects to increase its output by 7% to 10% in 2023, building on a production level of 3.7 million barrels of oil equivalent per day in the previous year [5] - Chevron aims to achieve $3 billion to $4 billion in structural cost savings by the end of 2023 [5] Free Cash Flow Expectations - The combination of increased production and reduced costs positions Chevron to reach a free cash flow inflection point in 2023, with the potential to generate an additional $12.5 billion in free cash flow at an average oil price of $70 per barrel [6] Market Catalysts - Chevron's strong execution sets the stage for robust production and free cash flow growth in 2026, particularly if oil prices exceed $70 [7] - Geopolitical tensions, such as those between the U.S. and Iran, could serve as catalysts for rising oil prices [7] Venezuela Operations - Chevron has significant operations in Venezuela and has increased production by over 200,000 barrels per day in recent years, with potential for a further 50% increase in the next 18 to 24 months [8] - Positive developments in Venezuela could enhance Chevron's stock price [8]