Occidental Petroleum Corporation (OXY), headquartered in Houston, Texas, is an integrated oil and gas company with substantial exploration and production exposure. Valued at $55.56 billion by market cap, the company engages in the acquisition, exploration, and development of oil and gas properties in the U.S., the Middle East, and North Africa. It also produces a variety of basic chemicals, petrochemicals, polymers, and specialty chemicals.
Shares of this energy giant have underperformed the broader market over the past year. OXY has gained 3.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.1%. The entire gain over the past year came in 2024, compared to the SPX’s 10.4% rise on a YTD basis.
Narrowing the focus, OXY’s underperformance looks less pronounced compared to the S&P Oil & Gas Expl & Prod SPDR (XOP). The exchange-traded fund has gained about 18% over the past year. Moreover, the ETF’s 8.2% returns on a YTD basis outshine OXY’s gains over the same time frame.
On May 7, OXY reported its Q1 results. The company’s adjusted net income and EPS declined 43.5% and 42.2% year over year to $604 million and $0.63, respectively. The fall in profits could be attributed to the lower oil and gas prices, with its oil and gas segment reporting pre-tax income of $1.20 billion, down from $1.60 billion in the previous quarter. The stock declined over 2.1% in the session following the day the results were released.
For the current fiscal year, ending in December, analysts expect OXY to report an EPS growth of 5.1% to $3.89 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 21 analysts covering OXY stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, 14 “Holds,” and one “Strong Sell.”
This configuration is slightly less bullish than three months ago, with seven suggesting a “Strong Buy.”
Recently, Truist Financial analyst Neal Dingmann downgraded OXY stock to a “Hold” rating with a price target of $69, implying a potential upside of 11.4% from current levels.
The mean price target of $71.95 represents a 16.1% premium to OXY’s current price levels. The Street-high price target of $90 suggests an ambitious upside potential of 45.3%.
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