Valued at a market cap of $43.2 billion, Occidental Petroleum Corporation (OXY) acquires, explores, and develops oil and gas properties. The Houston, Texas-based company also manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, and ethylene dichloride, among others.
This energy company has lagged behind the broader market over the past 52 weeks. Shares of OXY have declined 27.1% over this time frame, while the broader S&P 500 Index ($SPX) has surged 16.6%. Moreover, on a YTD basis, the stock is down 11.1%, compared to SPX’s 7.8% return.
Narrowing the focus, OXY has also underperformed the SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) 11.7% downtick over the past 52 weeks and 3.2% loss on a YTD basis.
OXY delivered its Q1 results on May 7, and its shares surged 6.2% in the following trading session. The company’s overall revenue grew 13.9% year-over-year to $6.8 billion, but fell short of Wall Street's expectations by 4.3%. However, on the brighter side, its adjusted EPS of $0.87 advanced 38.1% from the year-ago quarter, topping consensus estimates by 19.2%. Additionally, OXY lowered the midpoint of its fiscal 2025 capital expenditure guidance by $200 million and reduced its domestic operating cost outlook by $150 million due to improved operational efficiency and optimized scheduling in the Permian Basin and Gulf of Mexico. These developments likely helped further boost investor confidence.
For the current fiscal year, ending in December, analysts expect OXY’s EPS to decline 33.8% year over year to $2.29. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters.
Among the 23 analysts covering the stock, the consensus rating is a “Hold,” which is based on three “Strong Buy,” two "Moderate Buy,” 16 “Hold,” and two "Strong Sell” ratings.
The configuration has remained reasonably stable over the past three months.
On Jul. 23, Bank of America Corporation (BAC) analyst Jean Ann Salisbury maintained a “Hold” rating on OXY and set a price target of $44, indicating a marginal potential upside from the current levels.
The mean price target of $48.88 represents an 11.2% premium from OXY’s current price levels, while the Street-high price target of $65 suggests an ambitious upside potential of 47.9%.
