Occidental Petroleum Experiences Significant Underperformance, Analysts Weigh In
Occidental Petroleum Corporation (OXY), valued at a market cap of $36.5 billion, focuses on acquiring, exploring, and developing oil and gas properties. Based in Houston, Texas, the company also manufactures and markets essential chemicals such as chlorine, caustic soda, chlorinated organics, and potassium chemicals.
Recent Performance and Comparison to Market
Over the past 52 weeks, Occidental has noticeably underperformed compared to the broader market. Shares of OXY have fallen 39.7%, while the S&P 500 Index ($SPX) has increased by 10.2%. Year-to-date, OXY is down 21.5%, in contrast to SPX’s more modest loss of 3.9%.
Further analyzing its performance, OXY has also lagged behind the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which has declined by 24.8% over the same 52-week period, and 14.7% year-to-date.
Q4 Financial Results
On February 18, OXY reported mixed Q4 results. The stock surged 4.4% in the following trading session after the company posted an adjusted EPS of $0.80, reflecting an 8.1% increase from the previous year and exceeding consensus estimates by 19.4%. Free cash flow before working capital rose by 27.5% year-over-year to $1.4 billion, and total average production improved 18.6% to 1,463 thousand barrels of oil equivalent per day (Mboed). However, revenue declined by 9.2% year-over-year to $6.8 billion, falling short of forecasts by 4.2%. Lower pricing and decreased sales in its chemical, midstream, and marketing segments negatively impacted the top line.
Forecast and Analyst Ratings
Looking ahead to fiscal 2025, analysts project a decline in EPS of 28.6% year-over-year, bringing it down to $2.47. Notably, OXY has a strong earnings surprise history, having exceeded consensus estimates in each of the last four quarters.
Out of 24 analysts covering the stock, the consensus rating is a “Hold.” This includes three “Strong Buy,” two “Moderate Buy,” 17 “Hold,” and two “Strong Sell” ratings. This configuration indicates a less optimistic outlook than a month prior when five analysts rated it as a “Strong Buy.”
Price Targets
On April 22, Susquehanna retained a “Positive” rating on OXY but revised its price target down to $55, suggesting a 41.7% potential upside. The mean price target is $48.25, indicating a 24.3% premium over current price levels. Additionally, the highest target of $63 reflects a potential upside of 62.3%.
On the date of publication, Neharika Jain did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
