With 2012 just beginning, now's a smart time to gauge how the stocks you're interested in are likely to do this year and beyond. By knowing what stock analysts and fellow investors expect from a stock, you'll be smarter about whether you should buy it for your portfolio -- or sell it if you already own it.
Today, let's take a look at Chevron
Forecasts on Chevron
|Median Target Stock Price||$123|
|2011 EPS Estimate||$13.87|
|2012 EPS Estimate||$13.08|
|Expected Annual Earnings Growth, Next 5 Years||7%|
Source: Yahoo! Finance.
How Chevron could dominate 2012
As you can see, analysts have a somewhat mixed picture about Chevron. On one hand, the current target price represents about a 14% jump for the stock. Yet with earnings expected to drop in 2012, the picture for Chevron seems a bit clouded, despite its cheap valuation.
The U.S. may be Chevron's home, but the company's fortunes in 2012 will largely come from overseas. With Iran's recent actions in the Persian Gulf, the oil market faces the threat of supply disruptions that would come from a closure of the Strait of Hormuz. A resolution to that conflict could bring oil prices down sharply, while an escalation could similarly push them upward.
Elsewhere, Chevron has huge potential in Brazil. But a recent oil spill there prompted the Brazilian government to sue Chevron and drilling contractor Transocean
Also in Latin America, Venezuela's controversy with ExxonMobil
All in all, though, what would help Chevron more than anything would be strength in natural gas prices. With its acquisition of Atlas Energy last year, Chevron has even bigger exposure to natural gas than it once did. The right move could push profits above what analysts are expecting.
Still, Chevron is too big to provide truly massive gains. If you'd rather jump into the biggest potential gainers in energy, learn more about three other stocks that will prosper from $100 oil in the Motley Fool's latest special free report on energy. It's yours free, but only for a limited time, so take a look today.
Click here to add Chevron to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. The Motley Fool owns shares of Transocean. Motley Fool newsletter services have recommended buying shares of Petroleo Brasileiro and Chevron. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.