Occidental Petroleum (OXY) AI Stock Analysis

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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)

Market Cap

$40.78B

Dividend Yield2.11%

Average Volume (3M)9.46M

Price to Earnings (P/E)16.8

Beta (1Y)0.50

Revenue Growth1.35%

EPS Growth-33.30%

CountryUS

Employees13,323

SectorEnergy

Sector Strength46

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)0.87

Shares Outstanding984,132,700

10 Day Avg. Volume6,952,262

30 Day Avg. Volume9,462,859

Financial Highlights & Ratios

PEG Ratio-0.41

Price to Book (P/B)1.33

Price to Sales (P/S)0.00

P/FCF Ratio9.99

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$47.95

Price Target Upside14.41% Upside

Rating ConsensusHold

Number of Analyst Covering19

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

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

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

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
FANG	77 Outperform	$41.57B	8.70	14.26%	3.68%	47.89%	-7.87%
DVN	75 Outperform	$19.99B	7.09	20.88%	3.91%	12.06%	-16.37%
HES	75 Outperform	$41.36B	18.52	20.82%	1.43%	8.08%	10.59%
OXY	74 Outperform	$40.78B	16.77	9.43%	2.11%	1.35%	-33.30%
COP	73 Outperform	$109.48B	11.01	16.61%	3.55%	4.01%	-10.91%
EOG	73 Outperform	$61.58B	10.47	20.90%	3.34%	-0.23%	-14.82%
Sector *	57 Neutral	$7.22B	3.11	-4.49%	5.63%	0.82%	-49.15%

* Energy Sector Average

Performance Comparison

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.