It's been an unusual year for the oil exploration and production (E) sector. Significant players like (NYSE: CVX), Occidental Petroleum, ExxonMobil, and Devon Energy have notably underperformed the S 500 index.

Given the economy and the current state of the industry, it's fair that they continue to be out of favor with investors. And yet, many analysts remain positive about the sector. A Piper Sandler analyst recently maintained an overweight rating on Chevron's stock, even while cutting the price target to $180 from $188. That still implies a 15% upside over the next 12 months from the current price.

Piper Sandler's argument repeats the fundamental case for oil majors. With the price of oil still above $80 a barrel -- an excellent result in a slowing economy -- Chevron will continue to generate excellent cash flows. Indeed, the Wall Street consensus has Chevron generating $22.9 billion in free cash flow in 2024. Putting that figure into context, it represents 7.9% of Chevron's $289 billion market cap.

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Source Fool.com