The title of the article from The Street says it all: "Chevron Could Take Big Hit From Potential Payout in Ecuador."
Stock analysts who track Chevron are waking up to the fact that the company stands to pay out billions of dollars in compensation for its pollution of communities in Ecuador. Will that start to drive down the price of Chevron's stock?
Stock research company, Trefis, just estimated the potential impact on Chevron's stock valuation should the company pay the maximum penalty recently ordered by the Ecuadorian court. Assuming a payout by Chevron of the full $9.5 billion, Trefis predicted a decline in Chevron’s stock valuation of approximately 5% (from $104/share to $99/share).
Trefis bases its stock valuations on a model that analyzes the value of each part of a company's business using forecasts of fundamental business drivers, such as pricing, market share, and profit margins.
At close of business today, Chevron's stock traded at $108/share. Is Chevron stock heading for a fall?
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