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Occidental Petroleum (OXY)
NYSE:OXY

Occidental Petroleum (OXY) AI Stock Analysis

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OX

Occidental Petroleum

(NYSE:OXY)

Rating:74Outperform
Price Target:
$48.00
▲(14.53%Upside)
Occidental Petroleum's overall score reflects strong financial performance and positive operational highlights from the earnings call. While the technical analysis suggests some caution in the short-term, the company's strategic focus on cost management and promising developments in Oman support a resilient outlook. The valuation is reasonable, providing a balanced risk-reward profile.
Positive Factors
Asset Portfolio
OXY's quality asset portfolio, having one of the largest acreages in the US, combined with its efficient cost strategy, are expected to remain core advantages in the future.
Debt Reduction
Robust cash flows and asset divestitures support further debt reduction, which remains a key.
Financial Performance
OXY delivered an upbeat 1Q25 financial print, as CFPS of $3.05 was 6% above JPMe/STe on the back of 1% lower LOE, 10% lower TOTI costs, better than expected results at OxyChem and better Midstream profitability.
Negative Factors
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.
Production Guidance
OXY’s 2Q25 guide was a bit softer than expectations, with 2Q25 volumes trailing JPMe/STe by -1%/-2%, respectively.
Shareholder Returns
The company's cautious stance on oil prices pushes meaningful shareholder returns into 2028.

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

Occidental Petroleum Business Overview & Revenue Model

Company DescriptionOccidental Petroleum Corporation (OXY) is an international energy company with operations in the United States, the Middle East, and Latin America. It is engaged primarily in the exploration and production of oil and natural gas. In addition to its upstream activities, Occidental has a significant presence in the chemical sector through its subsidiary, OxyChem, which manufactures and markets basic chemicals and vinyls. The company is committed to sustainable practices and is actively involved in carbon management initiatives.
How the Company Makes MoneyOccidental Petroleum generates revenue primarily through the exploration, production, and sale of crude oil, natural gas, and natural gas liquids. Its upstream operations are the largest contributor to its earnings, with key assets located in the Permian Basin, the Rockies, the Gulf of Mexico, and international locations such as the Middle East and Colombia. The company sells its oil and gas production to various customers, including refiners and marketers. Additionally, Occidental's chemical segment, OxyChem, contributes to its revenue by producing and selling basic chemicals, vinyls, and specialty chemicals. This segment serves industries such as construction, automotive, and agriculture. Occidental also earns income from its midstream and marketing operations, which include transportation and storage of oil and gas. Strategic partnerships and joint ventures, especially in international markets, play a significant role in enhancing the company's production capabilities and accessing new resources.

Occidental Petroleum Key Performance Indicators (KPIs)

Any
Any
Production by Geography
Production by Geography
Shows where Occidental Petroleum is extracting oil and gas, highlighting regional strengths and potential exposure to geopolitical or environmental risks.
Chart InsightsOccidental Petroleum's U.S. production has rebounded strongly since 2023, driven by improved drilling efficiency and cost reductions in the Permian Basin, while international production remains stable. The recent earnings call highlights strategic moves like the Oman Block 53 extension, potentially adding significant resources. Despite market volatility and challenges in the chemical segment, Occidental's focus on operational efficiency and cost management positions it well for future growth, with reduced capital and operational expenses enhancing resilience.
Data provided by:Main Street Data

Occidental Petroleum Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 7.43%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
Occidental reported strong operational efficiency and cash flow with significant debt reduction and promising developments in Oman. Despite challenges such as market volatility, commodity price pressures, and chemical business headwinds, the company's strategic focus on cost management and carbon management initiatives provides a solid foundation for future growth.
Q1-2025 Updates
Positive Updates
Strong Cash Flow and Operational Efficiency
Generated $3 billion in operating cash flow before working capital in Q1 2025. Domestic oil and gas operating cost of $9.05 per BOE came in substantially below expectations.
Improvements in Drilling Efficiency
Achieved a 15% improvement in drilling duration per well in the Permian, with a more than 10% reduction in well costs compared to last year.
Significant Debt Reduction
Retired $2.3 billion in debt year-to-date, reducing annual interest expense by $370 million. Over the past 10 months, repaid a total of $6.8 billion.
Oman Contract Extension and Discoveries
In advanced negotiations to extend Block 53 contract by 15 years, unlocking over 800 million barrels of resources. Recent significant gas and condensate discovery in North Oman with estimated resources exceeding 250 million barrels of oil equivalent.
Midstream and Marketing Outperformance
Midstream business outperformed the high end of guidance range due to strong gas marketing optimization and healthy sulfur market.
Carbon Management Milestone
Signed a 25-year carbon offtake agreement supporting the storage of approximately 2.3 million metric tons of CO2 annually, illustrating demand for large-scale carbon management solutions.
Negative Updates
Uncertainty in the Market Environment
Commodity price volatility due to demand, policy, and supply uncertainties. Pressure from OPEC+ volumes and economic conditions.
Chemical Business Challenges
OxyChem faced operational challenges due to winter weather, impacting production and increasing raw material costs.
Macroeconomic Headwinds
Concerns about global trade, tech trade and tariffs, and the economic impact of potential recessions.
Company Guidance
During Occidental's First Quarter 2025 Earnings Conference Call, the company provided detailed guidance on several key metrics. The oil and gas segment achieved a production rate of just over 1.39 million barrels of oil equivalent (BOE) per day, aligning with the midpoint of their guidance. Operating costs for domestic oil and gas came in at $9.05 per BOE, significantly below expectations. In the Permian Basin, drilling efficiency improved by 15% year-over-year, leading to a 10% reduction in unconventional well costs. This efficiency allowed Occidental to reduce its rig count while still expecting increased production. The company also announced advanced negotiations to extend the Block 53 contract in Oman, potentially unlocking over 800 million gross barrels of additional resources. Occidental's midstream and marketing business outperformed expectations, driven by gas marketing optimization. The OxyChem segment exceeded expectations, delivering $215 million on an adjusted basis despite operational challenges. Looking ahead, the company has reduced its 2025 capital guidance by $200 million and projects $150 million in operational expense savings, aiming to enhance financial resilience amidst market volatility.

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
75
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
70
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
80
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
26.73B28.26B36.63B25.96B17.81B
Gross Profit
26.39B10.11B17.64B7.85B1.24B
EBIT
2.90B5.97B14.61B5.46B-770.00M
EBITDA
12.62B14.54B22.07B13.89B-6.14B
Net Income Common Stockholders
2.38B4.70B13.30B2.32B-13.53B
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.13B1.43B984.00M2.76B2.01B
Total Assets
85.44B74.01B72.61B75.04B80.06B
Total Debt
1.51B20.91B20.77B30.39B37.30B
Net Debt
1.51B19.48B19.78B27.62B35.29B
Total Liabilities
50.97B43.66B42.52B54.71B61.49B
Stockholders Equity
34.16B30.25B30.09B20.33B18.57B
Cash FlowFree Cash Flow
4.42B6.06B12.46B7.48B788.00M
Operating Cash Flow
11.44B12.31B16.81B10.25B3.84B
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
Neutral
Last Price41.91
Price Trends
50DMA
41.83
Positive
100DMA
45.11
Negative
200DMA
48.07
Negative
Market Momentum
MACD
0.01
Negative
RSI
51.09
Neutral
STOCH
67.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OXY, the sentiment is Neutral. The current price of 41.91 is below the 20-day moving average (MA) of 41.99, above the 50-day MA of 41.83, and below the 200-day MA of 48.07, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 67.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
77
Outperform
$41.57B8.7014.26%3.68%47.89%-7.87%
DVDVN
75
Outperform
$19.99B7.0920.88%3.91%12.06%-16.37%
HEHES
75
Outperform
$41.36B18.5220.82%1.43%8.08%10.59%
OXOXY
74
Outperform
$40.78B16.779.43%2.11%1.35%-33.30%
COCOP
73
Outperform
$109.48B11.0116.61%3.55%4.01%-10.91%
EOEOG
73
Outperform
$61.58B10.4720.90%3.34%-0.23%-14.82%
57
Neutral
$7.22B3.11-4.49%5.63%0.82%-49.15%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OXY
Occidental Petroleum
41.91
-16.89
-28.72%
COP
Conocophillips
85.95
-22.88
-21.02%
DVN
Devon Energy
31.56
-13.58
-30.08%
EOG
EOG Resources
110.77
-5.95
-5.10%
HES
Hess
133.45
-11.54
-7.96%
FANG
Diamondback
139.35
-44.08
-24.03%

Occidental Petroleum Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Occidental Petroleum Elects Board, Amends Incentive Plan
Positive
May 6, 2025

At the 2025 Annual Meeting of Shareholders held on May 2, 2025, Occidental Petroleum Corporation successfully elected ten board nominees, approved executive compensation, ratified KPMG as its independent auditor, and amended its Long-Term Incentive Plan. These decisions reflect strong shareholder support and are expected to influence the company’s strategic direction and governance positively.

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.