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Chevron Corporation (CVX), Apple, Netflix, Amazon: Did Analysts Get It Right?

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Predicting the future is hard, even if you’re a financial analyst, whose job is to forecast where a company is headed after a few years. To the credit of these analysts, they use a lot of tools that help them measure the impact of each monetary, stock, and fundamentals companies have revealed about their operations and financial health. And there are a lot of analyst forecasts that were spot on. However, analysts can only work with the information they have and the trends they observed, so a new or unexpected event that the analyst has not accounted into his prediction may easily derail his estimates.

With that in mind, let’s look into what analysts have said on CNBC about Chevron Corporation (NYSE:CVX), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), and Amazon.com, Inc. (NASDAQ:AMZN) last year, as well as what happened to those companies after the projections were made.

Just before the end of 2015, Cowen and Co. analyst Sam Margolin tagged Chevron Corporation (NYSE:CVX) as a top stock pick for 2016. Margolin, who set a $122 price target on the oil giant’s stock, which represented a 34% premium at the time, touted the company’s healthy balance sheet and the small proportion of debt compared with capital spending. The analyst was also positive that Chevron Corporation (NYSE:CVX) can turn to some of its investments, such as the Permian Basin in Texas, to fuel growth, or at least offset oil production declines, amid significant oil price declines that started in the second half of 2013. He added that oil prices are set to improve in 2016.

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Margolin’s bullish outlook on Chevron Corporation (NYSE:CVX) and oil prices proved to be accurate. The company’s stock price seemingly rose and fell alongside the fluctuations in oil prices. The analyst gave his forecast on December 29, 2015, when the stock was trading around $91.25 per share. The stock then fell to as low as $78.98 per share on January 20, 2016, around the time that crude oil prices plummeted to below $30 per barrel. Since then, it has gradually rallied to $118.59 per share, close to the analyst’s price target given at the time when a lot of analysts are bearish on oil companies in general. Perhaps slightly related, oil prices are currently above $50 per barrel, a $20 rise from figures earlier this year.

Another company that was getting negative readings from analysts at the end of 2015 was Apple Inc. (NASDAQ:AAPL). However, BMO Capital Markets analyst Tim Long went against the general Wall Street sentiment at the time, saying that the negative view of the tech giant’s supply chain and near-term unit sales present a buying opportunity for the stock. While Long lowered his price target to $142 from $145 and cut his iPhone sales estimates, the analyst said that the sales outlook is not as negative as expected, adding that new upgrade plans for iPhones can drive the upgrade rate, which measures how many iPhone users switch to the newer models.

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