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As per media reports, the U.S. energy giant Chevron Corp. (CVX - Analyst Report) has backed off from its attempt to produce renewable energy. The company has indefinitely stalled the proposed solar project at its Kapolei refinery.

The projects comprised a farm of solar panels which could generate about 1 megawatt of electricity and a solar thermal project that would have been used to power the company’s Hawaii refinery. The projects would have significantly contributed to Hawaii’s goal of energy generation from renewable sources.

As per the report, the company has put this renewable energy project on hold to focus on other projects such as its $54 billion Australian liquefied natural gas facility.

San Ramon, CA-based Chevron is one of the major publicly traded oil and gas companies in the world, based on proved reserves. The company possesses one of the healthiest balance sheets among peers, which helps it to capitalize on investment opportunities with the option to make strategic acquisitions.

However, due to its integrated nature, Chevron is particularly susceptible to downside risks from any weakness in the global economy. We are also concerned about the company’s high level of capital spending, which may result in reduced returns going forward.

On Aug 1, Chevron reported positive second-quarter results, after failing to meet estimates for three consecutive quarters before that. Earnings per share came in at $2.98, well above the Zacks Consensus Estimate of $2.68 and also improved from the year-ago profit of $2.77 per share, primarily on higher oil prices. However, production declined year over year.

Presently, Chevron carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. market in the next one to three months.

Meanwhile, one can consider better-ranked players from the broader energy space like Sunoco Logistics Partners L.P. (SXL - Analyst Report), Patterson-UTI Energy Inc. (PTEN - Analyst Report) and Cameron International Corp. (CAM - Analyst Report). All these stocks sport a Zacks Rank #1 (Strong Buy).

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