Shares of Chevron are posting a second day of strong gains, bolstered by an upgrade at Credit Suisse, after the energy giant raised its outlook for oil and gas production on Friday and reported quarterly earnings that topped Wall Street's expectations.

Chevron's stock price jumped more than 3.5 percent, to about $119, on Monday, bringing its two-day gain to roughly 7 percent. The shares are still down about 5 percent this year, roughly in line with the loss for the broader S&P 500 energy sector.

Chevron reported a $4 billion profit for the third quarter of 2018, more than double its earnings during the same period a year ago. The San Ramon, California-based company pumped at a record level last quarter, and executives said they now expect to hit the upper range of their guidance for oil and gas output for the year.

Credit Suisse on Monday upgraded the company's stock to outperform from neutral. The investment bank maintained its price target of $138 on the shares.

The bank said Chevron "continues to execute on its already superior growth outlook," even as its stock trades at a "wider than normal" discount to fellow U.S.-headquartered oil major Exxon Mobil.

Chevron now says it expects its oil and gas production to grow at the top end of its previously forecast range of 4 percent to 7 percent.

That should yield better capital efficiency in 2018 and boost free cash flow, in Credit Suisse's view. Healthier cash flow will allow Chevron's management to reward investors with a competitive quarterly dividend payment and potentially expand its $3 billion per year share buyback program, the bank said.

The engine behind Chevron's growing output is its Wheatstone and Gorgon natural gas projects in Australia, the Permian Basin underlying Texas and New Mexico and several offshore projects, according to Credit Suisse.