Occidental Petroleum (OXY – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Suvro Sarkar from DBS maintained a Hold rating on the stock and has a $54.00 price target.
Suvro Sarkar has given his Hold rating due to a combination of factors that balance Occidental Petroleum’s strengths and challenges. The company has shown better-than-expected financial performance, with significant contributions from its recent CrownRock acquisition, which is expected to drive growth in the coming quarters. Occidental’s focus on operational excellence and capital expenditure optimization, particularly in the Permian Basin, highlights its strategic advantages.
However, despite these positive developments, there are concerns about Occidental’s high leverage compared to its peers, which could limit share price appreciation. The company’s strategy to balance growth with debt reduction is crucial, as it aims to prevent past financial stress experienced after the Anadarko acquisition. Additionally, Occidental’s dividend yield remains lower than its peer group due to its focus on deleveraging. Once the company achieves its debt reduction targets and effectively utilizes excess cash flows for shareholder returns, the rating may be revisited.
In another report released on February 20, UBS also maintained a Hold rating on the stock with a $56.00 price target.