EXPECTATIONS SO HIGH ITS MAKING PEOPLE NOT BUY!

Mr. Bullish
Jul 18
2 min read

🛢️ CHEVRON (CVX) BUYS HESS FOR $53B 💥

Chevron just closed a massive $53 billion all-stock deal for Hess, securing a juicy stake in Guyana’s Stabroek oil field—packed with ~11 billion barrels 🌍 After an arbitration win over Exxon, CVX stock popped ~3%. The deal adds growth potential with minimal debt pressure since no big cash outlays. Analysts call it strategic, boosting production and free cash flow—rating: Strong Buy

Valuation & Metrics: P/E ~15x, P/B ~1.7x; solid gross margins, healthy free cash flow; low dividend yield (~3.5%), payout ratio ~45%; debt-to-equity moderate (~0.35).
Analyst Target: Avg ~$185 (range $165–$200)—Buy/Outperform.

🧪 3M (MMM) SMASHES Q2 ESTIMATES

3M beat Q2 revenue (‑3.9% YoY) and EPS of $2.16 vs $2.01 est. (+4% raise) with free cash flow conversion over 100 %! MMM rallied ~1% pre-market on strong guidance .

Valuation: P/E ~18×, P/B ~3×, P/S ~2.5×; gross margin ~30%, P/FCF ~15×; dividend yield ~4%, payout ~60%; debt-to-equity ~1; FCF robust.
Analyst Target: Avg ~$155 (range $140–$170)—Buy, overweight.

📺 NETFLIX (NFLX) BEATS, STOCK DIPS

Netflix hit Q2: $11.08B revenue (+16%), EPS $7.19 (+47%). Free cash flow forecast upped to $8–8.5B. Yet stock dropped ~2–5% post-earnings—valuation at 44× forward P/E is sky-high

Valuation & Metrics: P/E ~44×, P/S ~10×, P/B n/a; gross margin ~47%, FCF ~6.9B; debt/equity ~0.63; no dividend.
Analyst Target: KeyBanc $1,390, Pivotal $1,600—Overweight / Buy.

💡 TAKE NOTE:

Chevron scored big with the Hess buy—growth w/out piling on debt.
3M delivered dependable results and high free cash flow, backing that sweet 4% dividend.
Netflix, despite the dip, is still riding content growth and global momentum—but it’s priced like perfection.