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Why Did Warren Buffett Significantly Increase His Stake in Chevron?

When Warren Buffett acts, the world listens

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Buffett bucks the woke ESG agenda and overweight’s this dirty industry

  • In the S&P500, the Energy sector makes up just 3.7%
  • Buffett place a heavy bet on Energy
    • The investment in Chevron and Occidental add up to around 10% of his portfolio
    • This represents an Energy overallocation of 6.3%

Investing in Chevron means betting on rising oil prices

  • There has been a 91% correlation between Chevron’s stock price and crude oil price over the past year
  • Hence predicting the oil price will help to estimate Chevron’s revenue

How does the consensus assess Chevron?

  • Analysts equally divided between BUY and HOLD
  • In the past few months, analysts constantly increased their target price estimate in response to oil price shocks

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