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Occidental Petroleum (OXY)
NYSE:OXY
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Occidental Petroleum
(NYSE:OXY)72Outperform
Positive Factors
Debt Reduction
Occidental Petroleum Corp. announced progress on debt reduction goals with $1.2bn of asset divestitures.
Dividend Increase
There was a 9% increase to the base dividend announced by Occidental Petroleum Corp.
Negative Factors
Legal and Remediation Costs
OXY took a $925m charge for remediation settlement for chems clean-up in NJ, expected to be paid out over 10 years, after a negative court decision.
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.
Over-leverage Concern
Despite expected inorganic growth, share price upside potential is limited as OXY remains over-leveraged compared to its peers.
Occidental Petroleum (OXY) vs. S&P 500 (SPY)
Market Cap
$43.70B
Dividend Yield1.89%
Average Volume (3M)11.83M
Price to Earnings (P/E)19.0
Beta (1Y)0.44
Revenue Growth-4.35%
EPS Growth-37.69%
CountryUS
Employees13,323
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.45
Shares Outstanding939,176,330
10 Day Avg. Volume13,836,794
30 Day Avg. Volume11,828,505
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.63
Price to Cash Flow (P/CF)3.30
P/FCF Ratio2.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$60.06Price Target Upside31.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Occidental Petroleum Business Overview & Revenue Model
Company DescriptionOccidental Petroleum Corporation (OXY) is a leading international energy company, engaged primarily in the exploration and production of crude oil and natural gas. The company operates through three main segments: Oil and Gas, Chemical, and Midstream and Marketing. Its Oil and Gas segment is focused on the exploration, development, and production of oil and gas properties, primarily in the United States, the Middle East, and Latin America. The Chemical segment, known as OxyChem, manufactures and markets basic chemicals and vinyls. The Midstream and Marketing segment is involved in the transportation and marketing of oil and gas, as well as power generation.
How the Company Makes MoneyOccidental Petroleum generates revenue through its three primary business segments. The Oil and Gas segment is the largest revenue contributor, where the company explores for and produces crude oil and natural gas, selling these commodities in the global market. Revenue from this segment is heavily influenced by fluctuations in oil and gas prices and production volumes. The Chemical segment, OxyChem, generates revenue by producing and selling chemicals such as chlorine, caustic soda, and polyvinyl chloride (PVC) resins, which are used in various industrial applications. The Midstream and Marketing segment adds to the company's revenue by providing transportation, storage, and marketing services for oil and gas, as well as generating power. Strategic partnerships and joint ventures, as well as efficiency improvements and technological advancements, also play a significant role in enhancing Occidental's profitability.
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
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.75
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
45.51
Price Trends
49.09
Negative
49.67
Negative
53.72
Negative
Market Momentum
-0.56
Positive
34.93
Neutral
12.54
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OXY, the sentiment is Negative. The current price of 45.51 is below the 20-day moving average (MA) of 48.37, below the 50-day MA of 49.09, and below the 200-day MA of 53.72, indicating a bearish trend. The MACD of -0.56 indicates Positive momentum. The RSI at 34.93 is Neutral, neither overbought nor oversold. The STOCH value of 12.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $115.33B | 11.61 | 16.16% | 3.44% | -2.57% | -14.01% | |
76 Outperform | $267.61B | 15.64 | 11.28% | 4.34% | -1.90% | -14.56% | |
76 Outperform | $466.63B | 13.72 | 14.38% | 3.61% | 1.86% | -11.52% | |
75 Outperform | $43.90B | 15.85 | 27.41% | 1.32% | 20.51% | 99.86% | |
72 Outperform | $43.70B | 19.04 | 8.88% | 1.89% | -4.35% | -37.69% | |
68 Neutral | $6.76B | 8.15 | 20.26% | 5.38% | 17.61% | -75.78% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% |
* Energy Sector Average
Performance Comparison
OXY
Occidental Petroleum
45.51
-14.61
-24.30%
APA
APA
18.54
-11.00
-37.24%
CVX
Chevron
150.81
8.63
6.07%
COP
Conocophillips
88.88
-19.95
-18.33%
XOM
Exxon Mobil
105.44
2.16
2.09%
HES
Hess
141.34
0.23
0.16%
Occidental Petroleum Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -6.82% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Occidental demonstrated strong performance with record production, successful debt reduction, and significant cash flow generation. Strategic advancements in carbon management and reserve replacement further highlight the company's strengths. However, challenges such as environmental liabilities, weather impacts on production, and expected declines in midstream earnings present concerns. Overall, positive achievements outweigh the challenges.Highlights
Record US Oil Production
Occidental achieved the highest annual US oil production and record total production of 1.33 million BOE per day in 2024, exceeding the upper end of full-year guidance.
Debt Reduction Ahead of Schedule
The company achieved its near-term debt repayment target of $4.5 billion seven months ahead of schedule, demonstrating strong financial management.
Significant Cash Flow Generation
In 2024, Occidental generated $4.9 billion of free cash flow, enabling $800 million in common dividends.
Reserve Replacement Success
Occidental increased its year-end proved reserve balance to 4.6 billion BOE, achieving a reserves replacement ratio of 230% for 2024.
OxyChem Business Outperformance
The OxyChem segment exceeded original guidance, achieving over $1.1 billion in pre-tax income in 2024.
Innovative Carbon Management Initiatives
Strategic advancements in Direct Air Capture (DAC) technology, including foundational Carbon Dioxide Removal (CDR) agreements and US Department of Energy funding for the South Texas DAC hub.
Lowlights
Environmental Remediation Liability
An increase in long-term environmental remediation liability was announced due to a recent unfavorable federal court ruling, resulting in a reported loss of $0.32 per diluted share.
Weather and Operational Challenges
Lower production volumes from domestic offshore and international assets were reported due to weather events and PSE-related impacts.
Expected Lower Midstream Earnings
Midstream earnings are expected to be lower in 2025 due to reduced gas transportation optimization opportunities and lower distribution from asset sales.
Temporary OxyChem Constraints
OxyChem's first-quarter income is expected to be lower due to winter storm impacts, an unplanned outage, and increased raw material costs.
Company Guidance
During the Occidental Petroleum Corporation's Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the upcoming year. The company plans to invest between $7 billion and $7.2 billion in its energy and chemicals business for 2025, with a focus on short-cycle, high-return assets. Full-year production is expected to average 1.42 million barrels of oil equivalent (BOE) per day, representing mid-single-digit growth from 2024. The company aims to maintain strategic priorities such as debt reduction, with $1.2 billion in divestiture proceeds allocated for this purpose. Additionally, Occidental plans to increase its common dividend by 9%. Its OxyChem business is projected to generate over $1 billion in pre-tax income, while the midstream segment is expected to benefit from revised crude transportation contracts. The company also highlighted operational efficiencies, reporting a 9% reduction in lease operating expenses per barrel and a 12% decrease in bulk costs.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.