Occidental Petroleum (OXY) AI Stock Analysis

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Occidental Petroleum

(NYSE:OXY)

72Outperform

Occidental Petroleum demonstrates strong financial health with robust cash flow and successful debt management, contributing to its stability. The recent earnings call further supports a positive outlook with strategic growth and operational efficiency. However, technical indicators and valuation suggest caution, as mixed trends and a slightly high P/E ratio may limit immediate upside potential.

Positive Factors

Asset Portfolio

OXY's quality asset portfolio, combined with an efficient cost strategy, is expected to remain a core advantage in the future.

Debt Reduction

Robust cash flow generation helps achieve debt reduction targets ahead of schedule.

Dividend Increase

There was a 9% increase to the base dividend announced by Occidental Petroleum Corp.

Negative Factors

Leverage and Debt

OXY assumed a significant amount of debt to acquire the acreage, increasing pro-forma leverage, with a goal to reach sub-1x leverage only by mid-2027.

Macroeconomic Risks

OXY is exposed to significant macroeconomic risks, as earnings are closely tied to price volatility of oil, NGLs, natural gas, and other chemical products.

Oil Productivity

OXY saw another year of decline in the Delaware where they still produce 70% of oil volumes, with productivity per foot declining compared to peers that saw productivity growth.

Occidental Petroleum (OXY) vs. S&P 500 (SPY)

Market Cap

$36.42B

Dividend Yield2.32%

Average Volume (3M)13.61M

Price to Earnings (P/E)15.9

Beta (1Y)0.68

Revenue Growth-4.35%

EPS Growth-37.69%

CountryUS

Employees13,323

SectorEnergy

Sector Strength62

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)2.45

Shares Outstanding939,782,530

10 Day Avg. Volume15,817,064

30 Day Avg. Volume13,608,738

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.68

Price to Cash Flow (P/CF)3.40

P/FCF Ratio2.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$54.53

Price Target Upside51.01% Upside

Rating ConsensusHold

Number of Analyst Covering20

Occidental Petroleum Business Overview & Revenue Model

Company DescriptionOccidental Petroleum Corporation (OXY) is a leading international energy company, engaged primarily in the exploration and production of crude oil and natural gas. The company operates through three main segments: Oil and Gas, Chemical, and Midstream and Marketing. Its Oil and Gas segment is focused on the exploration, development, and production of oil and gas properties, primarily in the United States, the Middle East, and Latin America. The Chemical segment, known as OxyChem, manufactures and markets basic chemicals and vinyls. The Midstream and Marketing segment is involved in the transportation and marketing of oil and gas, as well as power generation.

How the Company Makes MoneyOccidental Petroleum generates revenue through its three primary business segments. The Oil and Gas segment is the largest revenue contributor, where the company explores for and produces crude oil and natural gas, selling these commodities in the global market. Revenue from this segment is heavily influenced by fluctuations in oil and gas prices and production volumes. The Chemical segment, OxyChem, generates revenue by producing and selling chemicals such as chlorine, caustic soda, and polyvinyl chloride (PVC) resins, which are used in various industrial applications. The Midstream and Marketing segment adds to the company's revenue by providing transportation, storage, and marketing services for oil and gas, as well as generating power. Strategic partnerships and joint ventures, as well as efficiency improvements and technological advancements, also play a significant role in enhancing Occidental's profitability.

Occidental Petroleum Financial Statement Overview

Summary

Occidental Petroleum showcases a robust cash flow position and stable balance sheet management, which are crucial for long-term sustainability. While income statement metrics show profitability, declining revenue and margins pose potential risks. The company should focus on boosting revenue and optimizing operational efficiencies to enhance financial health.

Income Statement

Positive

Occidental Petroleum's income statement exhibits a mixed performance. The gross profit margin and net profit margin have shown improvement in recent years, indicating better cost management and profitability. However, revenue has seen a decline from 2022 to 2024, which is a concern. The EBIT and EBITDA margins have also decreased, reflecting potential operational inefficiencies or market challenges.

Balance Sheet

Positive

The balance sheet reveals a relatively stable equity position with improving debt-to-equity ratios over the years, reflecting effective debt management. However, total assets have decreased, and the equity ratio is impacted by substantial liabilities. The return on equity has fluctuated, with a decline in recent years, indicating challenges in generating returns for shareholders.

Cash Flow

Positive

Occidental Petroleum's cash flow analysis highlights strong operating cash flow generation, which is a positive indicator of its core business strength. The free cash flow has been more volatile, but recent trends show improvement. The operating cash flow to net income ratio is strong, suggesting efficient conversion of earnings into cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
26.73B	28.26B	36.63B	25.96B	17.81B
	Gross Profit
26.39B	10.11B	17.64B	7.85B	1.24B
	EBIT
2.90B	5.97B	14.61B	5.46B	-770.00M
	EBITDA
12.62B	14.54B	22.07B	13.89B	-6.14B
	Net Income Common Stockholders
2.38B	4.70B	13.30B	2.32B	-13.53B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.13B	1.43B	984.00M	2.76B	2.01B
	Total Assets
85.44B	74.01B	72.61B	75.04B	80.06B
	Total Debt
1.51B	20.91B	20.77B	30.39B	37.30B
	Net Debt
1.51B	19.48B	19.78B	27.62B	35.29B
	Total Liabilities
50.97B	43.66B	42.52B	54.71B	61.49B
	Stockholders Equity
34.16B	30.25B	30.09B	20.33B	18.57B
Cash Flow		Free Cash Flow
4.42B	6.06B	12.46B	7.48B	788.00M
	Operating Cash Flow
11.44B	12.31B	16.81B	10.25B	3.84B
	Investing Cash Flow
-14.59B	-6.98B	-4.87B	-1.17B	-778.00M
	Financing Cash Flow
3.84B	-4.89B	-13.71B	-8.56B	-4.51B

Occidental Petroleum Technical Analysis

Technical Analysis Sentiment

Negative

Last Price36.11

Price Trends

50DMA

47.27

Negative

100DMA

48.32

Negative

200DMA

51.78

Negative

Market Momentum

MACD

0.39

Negative

RSI

56.97

Neutral

STOCH

60.42

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OXY, the sentiment is Negative. The current price of 36.11 is below the 20-day moving average (MA) of 46.45, below the 50-day MA of 47.27, and below the 200-day MA of 51.78, indicating a bearish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 56.97 is Neutral, neither overbought nor oversold. The STOCH value of 60.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OXY.

Occidental Petroleum Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EOG	82 Outperform	$60.13B	9.69	22.29%	3.40%	0.88%	-13.66%
COP	78 Outperform	$108.30B	10.97	16.16%	3.64%	-2.57%	-14.01%
HES	75 Outperform	$41.18B	14.87	27.41%	1.48%	20.51%	99.86%
DVN	74 Outperform	$18.57B	6.27	21.77%	4.37%	3.00%	-21.63%
OXY	72 Outperform	$36.42B	15.85	8.88%	2.32%	-4.35%	-37.69%
FANG	64 Neutral	$36.04B	8.02	12.20%	4.99%	31.55%	-9.00%
Sector *	57 Neutral	$7.52B	4.07	-3.52%	8.38%	-0.14%	-64.60%

* Energy Sector Average

Performance Comparison

OXY

Occidental Petroleum

36.11

-31.63

-46.69%

COP

Conocophillips

82.66

-46.42

-35.96%

DVN

Devon Energy

26.80

-25.98

-49.22%

EOG

EOG Resources

104.96

-29.19

-21.76%

HES

Hess

127.51

-28.30

-18.16%

FANG

Diamondback

119.25

-80.12

-40.19%

Occidental Petroleum Earnings Call Summary

Earnings Call Date: Feb 18, 2025 | % Change Since: -25.68% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

Occidental demonstrated strong performance with record production, successful debt reduction, and significant cash flow generation. Strategic advancements in carbon management and reserve replacement further highlight the company's strengths. However, challenges such as environmental liabilities, weather impacts on production, and expected declines in midstream earnings present concerns. Overall, positive achievements outweigh the challenges.

Highlights

Record US Oil Production

Occidental achieved the highest annual US oil production and record total production of 1.33 million BOE per day in 2024, exceeding the upper end of full-year guidance.

Debt Reduction Ahead of Schedule

The company achieved its near-term debt repayment target of $4.5 billion seven months ahead of schedule, demonstrating strong financial management.

Significant Cash Flow Generation

In 2024, Occidental generated $4.9 billion of free cash flow, enabling $800 million in common dividends.

Reserve Replacement Success

Occidental increased its year-end proved reserve balance to 4.6 billion BOE, achieving a reserves replacement ratio of 230% for 2024.

OxyChem Business Outperformance

The OxyChem segment exceeded original guidance, achieving over $1.1 billion in pre-tax income in 2024.

Innovative Carbon Management Initiatives

Strategic advancements in Direct Air Capture (DAC) technology, including foundational Carbon Dioxide Removal (CDR) agreements and US Department of Energy funding for the South Texas DAC hub.

Lowlights

Environmental Remediation Liability

An increase in long-term environmental remediation liability was announced due to a recent unfavorable federal court ruling, resulting in a reported loss of $0.32 per diluted share.

Weather and Operational Challenges

Lower production volumes from domestic offshore and international assets were reported due to weather events and PSE-related impacts.

Expected Lower Midstream Earnings

Midstream earnings are expected to be lower in 2025 due to reduced gas transportation optimization opportunities and lower distribution from asset sales.

Temporary OxyChem Constraints

OxyChem's first-quarter income is expected to be lower due to winter storm impacts, an unplanned outage, and increased raw material costs.

Company Guidance

During the Occidental Petroleum Corporation's Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the upcoming year. The company plans to invest between $7 billion and $7.2 billion in its energy and chemicals business for 2025, with a focus on short-cycle, high-return assets. Full-year production is expected to average 1.42 million barrels of oil equivalent (BOE) per day, representing mid-single-digit growth from 2024. The company aims to maintain strategic priorities such as debt reduction, with $1.2 billion in divestiture proceeds allocated for this purpose. Additionally, Occidental plans to increase its common dividend by 9%. Its OxyChem business is projected to generate over $1 billion in pre-tax income, while the midstream segment is expected to benefit from revised crude transportation contracts. The company also highlighted operational efficiencies, reporting a 9% reduction in lease operating expenses per barrel and a 12% decrease in bulk costs.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.