Occidental Petroleum Corporation (OXY), based in Houston, Texas, is a leading integrated oil and gas company with a strong focus on exploration and production. With a market cap of $46.1 billion, the company produces a range of basic chemicals, petrochemicals, polymers, and specialty chemicals in addition to its oil and gas operations.
Companies valued at $10 billion or more are generally considered "large-caps," and Occidental Petroleum fits this criterion perfectly, signifying its substantial size, stability, and influence in the energy sector.
OXY is dedicated to sustainability and environmental stewardship, investing in advanced technologies and practices to reduce its environmental footprint and ensure the safety and well-being of its employees and communities. Beyond operational excellence, Occidental's strong focus on its upstream segment provides significant leverage to rising oil prices.
Despite its strengths, OXY stock are trading 26.7% below its 52-week high of $71.18, which it hit on Apr. 12. OXY has seen a 12.3% decline over the last three months, underperforming S&P 500 Energy Sector SPDR Fund (XLE), which has plunged 3.7% over the same period.
In the longer term, OXY is down 12.6% on a YTD basis, and the shares have dipped 20.1% over the past 52 weeks. In comparison, the XLE surged 3.3% in 2024 but has fallen 5.9% over the past year.
To confirm the recent bearish price trend, OXY has been trading below its 50-day and 200-day moving average since late July.
OXY's weak price momentum may be attributed to its increasing debt burden following the recent acquisition of CrownRock. The company took on significant debt to finance the $12 billion deal, borrowing $9.1 billion and assuming an additional $1.2 billion of CrownRock's existing debt. This substantial increase in leverage raises concerns among investors about the company’s financial stability and its ability to manage cash flow effectively.
Shares of Occidental Petroleum closed down more than 1% on Sept. 4, as energy stocks were pressured by a decline in WTI crude prices, which hit an 8-3/4 month low.
Moreover, OXY saw a decline of over 2% on Aug. 13 following reports that CrownRock Holdings LP was selling 29.6 million shares of its OXY holdings.
Highlighting the contrast in performance, one of OXY's industry peers, ConocoPhillips (COP), has outperformed OXY with a 9% dip on a YTD basis.
Analysts are optimistic about OXY's prospects despite its recent underperformance compared to XLE. The stock has a consensus rating of "Moderate Buy" from 21 analysts in coverage. The mean price target of $71.27 reflects a 36.6% premium over the prevailing price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
