Freedom Capital Markets downgraded Chevron (NYSE: CVX) from Hold to Sell and set a $165 price target. Shares were down more than 3% intraday on Tuesday following the call.
The firm said the sharp rally in U.S. oil and gas equities in recent months had occurred largely in disregard of a deteriorating fundamental backdrop. According to the analyst, declining oil prices and an oversupplied market continued to be overlooked by investors, creating heightened risk. The firm described rising energy equities alongside falling crude prices as a dangerous setup.
Freedom Capital argued that optimism across the sector, partly sparked by U.S. operations in Venezuela, was misplaced. The analyst said the global oil surplus was likely to persist at least through the first half of 2026, continuing to pressure hydrocarbon prices. Under this scenario, the firm expected weak operating and financial performance across oil producers and refiners.
The downgrade also reflected a 9% quarter-over-quarter decline in average WTI crude prices during the fourth quarter of 2025, combined with lower refined product prices. Freedom Capital said these trends pointed to weak fourth-quarter results and warned that the upcoming earnings season, beginning in the second half of January, was likely to put renewed pressure on U.S. oil and gas stock prices.
