In a report released today, David Deckelbaum from TD Cowen downgraded Occidental Petroleum (OXY – Research Report) to a Hold, with a price target of $45.00.
David Deckelbaum has given his Hold rating due to a combination of factors impacting Occidental Petroleum’s financial outlook. The recent decline in WTI pricing, coupled with OPEC’s decision to release spare capacity, has led to increased pressure on OXY shares. Additionally, the company’s cash flow profile has become less appealing as it continues to allocate capital outside its E&P business while maintaining higher leverage compared to its large-cap peers.
Despite the acquisition of CrownRock, which improved oil productivity in the Midland area, OXY still faces challenges in the Delaware region, where productivity has continued to decline. The company’s efforts to reduce leverage have been hindered by significant debt from the acquisition and the ongoing overhang from Berkshire preferred shares. Consequently, OXY’s return on capital program remains under pressure, contributing to the Hold rating.
In another report released yesterday, UBS also maintained a Hold rating on the stock with a $44.00 price target.
Based on the recent corporate insider activity of 55 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of OXY in relation to earlier this year.