Kaitlyn Emerick Keiarra Ragland Victoria Saber. Agenda:  Company Introduction  Overview Analysis  Analysis of Firm Riskiness  Financial Statement.

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Presentation transcript:

Kaitlyn Emerick Keiarra Ragland Victoria Saber

Agenda:  Company Introduction  Overview Analysis  Analysis of Firm Riskiness  Financial Statement Analysis  Firm Valuation  Future Recommendations

Company Overview & Facts

SWOT Analysis & Competitors S Presence across the energy value chain -Strategic acquisition of Atlas Energy -Wide geographic presence W -Involvement in the environmental disaster in Ecuador -Strain on sales of refined products T Regulation of greenhouse gas emissions Civil unrest in Nigeria threatens crude oil production Commodity prices risks O Planned investments for future development Agreement to acquire Marcellus shale acreage Technological innovations $41.06 Market Cap 130.8B --- CVX $ Market Cap B $87.04 Market Cap $ CVX $ Market Cap B

Environmental Health Safety

CalculatedBeta Industry Beta.90 as of 2/27/2013 Reuters Beta.80 as of 2/27/2013 Yahoo Beta1.17 as of 2/27/2013 Group Calculation.77 as of 2/27/2013 CAPM Computation3.22%

Ratio Analysis: Liquidity

Ratio Analysis: Asset Management

Ratio Analysis: Debt Management

Ratio Analysis: Profitability & Market Value

Firm Valuation: Discount Dividend Model (DDM) Do(1+g)/re-g = 3.69/  For Chevron’s discount dividend model,  re (calculated from CAPM) 3.22  constant growth = 2.56 Calculations = Stock Price $ Currently trading: $ UNDERVALUED Year Dividend$3.51$3.09$2.84$2.66$2.53$2.26 % Change %13%8.80%6.77%5.14%11.95% Average of all years 9.25% Cost of EquityCost of Debt Debt to Value Equity to ValueWACC Terminal WACC 4.56%3.50%41%59%4.71% Firm Valuation: WACC

Chevron's P/E Ratio Industry P/EChevron's EPSStock Price $12.2$13.32$ Firm Valuation: Valuation using multiples (P/E ratio)

Firm Valuation Revenue Growth Fiscal Year Total Revenues 241, , , , , Revenue Growth Rate-4.88%19.23%16.25%-59.06% 5 year average -7.12% 2 year average 7.17% Analysts predict -1.30%(yahoo finance) Our Prediction -1.30% Tax Rate %43.30%40.37%43.05%44.19% Average42.81%

Firm Valuation: Free Cash Flow Model (FCFM)

Firm Valuation: Stock Price Valuation

Recommendations Begin Investing Hold stock Currently Stable Well Established Company Potential Future Gains Increased Stock Price Value Continued Growth of Dividends