The shares of Chevron Corporation (NYSE:CVX) are trading up 1.3% at $124.83, after Morgan Stanley initiated coverage on the oil major with an "overweight" rating and a $146 price target -- an 18.5% premium to last Friday's close. The brokerage firm called CVX low risk, and waxed optimistic on the company's free cash flow and dividend coverage.
Most analysts echo Morgan Stanley's bullish outlook, with 11 of 14 brokerages maintaining a "buy" or better rating, and not a single "sell" on the books. Plus, the average 12-month price target sits at $137.73, well above CVX stock's record high of $135.10 from June 2014.
Options traders, on the other hand, have been more bearish than usual toward the Dow stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Chevron's 50-day put/call volume ratio of 0.67 ranks in the 82nd annual percentile. While this shows that calls have outpaced puts on an absolute basis, the high ranking indicates the rate of put buying has been accelerated.
This sentiment backdrop comes amid CVX stock's nearly 24% surge off its Dec. 26 low near the century mark. More recently, the energy shares have pulled back from their March 19 year-to-date peak at $126.92, but appear to have found a foothold atop their 30-day moving average -- a trendline that's guided Chevron higher since mid-January.