Chevron share price forecast: Mizuho sees a 30% upside

Chevron Corporation (NYSE: CVX) is currently down more than 15% versus its year-to-date high but a Mizuho analyst is convinced the story moving forward will be a different one.

Chevron stock should be worth $209

On Wednesday, Nitin Kumar upgraded the oil and gas behemoth to “buy” and raised his price objective to $209 – up roughly 30% from here.

The analyst expects the Chevron stock to benefit as productivity continues to tick up in the Permian Basin. His research note reads:

Although oil mix has trended below the long-term 50% indicated by CEO Mike Wirth on the earnings call, we expect it to increase as new well productivity improves.

Last month, the multinational said a decline in oil prices resulted in a near 50% hit to its profit in the second quarter (find out more).

Global energy market is undersupplied

Nitin Kumar also reiterated in his research note on Wednesday that the energy market globally is still undersupplied.

The Mizuho analyst is bullish on Chevron stock because he forecasts the Tengiz expansion to boost the company’s free cash flow as well by $5.0 billion in the back half of this decade.

There are secular tailwinds for the energy sector … this all provides substantial confidence in Chevron’s ability to meet its upstream growth outlook.

The oil and gas stock currently pays a dividend yield of 3.77% that makes up for another good reason to invest in it. Also on Wednesday, Amrita Sen of Energy Aspects said oil prices could hit $90 moving forward.