Chevron (CVX) was upgraded Tuesday to Overweight from Neutral with a $176 price target at J.P. Morgan, based on the bank’s view that the company is in an attractive phase of its investment cycle following the completion of the Hess merger, while structural cost reduction efforts are on track to deliver $3B-$4B in annual run-rate savings by 2026.
Chevron (CVX) is in exclusive negotiations with a customer for a power generation facility that will support a data center, which will leverage the company’s large domestic production base of more than 3 Bcf/day; while the company has not secured a firm commitment, it expects to reach a final investment decision in H1 2026 and deliver first power by 2027-28, and JPM’s Arun Jayaram estimated the project could generate mid-teens unlevered returns on capital.
Jayaram moved ConocoPhillips (COP) to Neutral from Overweight with a $98 PT, saying the stock trades at premium FCF/EV yields to Big Oil peers in 2026-27, while still viewing the company as a long-term core holding given its long-term core E&P holding due to its portfolio strength, inventory durability, and shareholder friendly cash return framework.
Among Canadian firms, Jayaram upgraded Suncor Energy (SU) to Overweight from Neutral with a C$75 PT, citing “remarkable” execution progress under the current management team, driven by outstanding results in the field that have consistently exceeded guidance, and the strength of its balance sheet that is supporting the return of 100% of its free cash flow to shareholders; the company kept up its progress in 2025 with record upstream production of 860K bbl/day and refining throughput of 480K boe/day.
Suncor (SU) has benefited from high diesel crack spreads and improved margins, running refineries at full capacity and exporting products globally, the analyst noted.
Finally, Jayaram lowered Cenovus Energy (CVE) to Neutral from Overweight with a C425 PT, saying the company has hit its stride from an execution standpoint both upstream and downstream, but relative valuation is no longer as compelling at updated strip pricing, which includes the recent widening in WCS differentials to ~$14/bbl in 2026-27.