Buy Chevron stock on weakness, BofA says

Chevron Corp.
CVX,
-0.74%
shares have been pummeled in recent weeks after a quarterly earnings miss for the oil giant and news it plans to merge with Hess Corp.
HES,
-0.60%
The stock is down around 15% and that “looks overdone,” BofA securities Doug Leggate said in a note Monday. Leggate upgraded his rating on Chevron’s stock to buy, and upped his price target to $200, from $190, which implies an upside of about 38% over Monday prices. “Assuming the potential deal closes on the agreed terms any rational assessment of what drives recognition of value concludes CVX investment case has been reset by favorable rate of change on growth, dividend capacity [and] portfolio depth,” the analyst said in the note. “Weakness provides a tactical opportunity to upgrade” the stock from neutral. Chevron shares have lost about 20% so far this year versus gains of 8% for the S&P 500 index
SPX,
+0.07%
and a loss of around 2% for the Dow Jones Industrial Average
DJIA,
-0.05%,
of which Chevron is a component.