Update shared on 25 Nov 2025
Fair value Increased 0.59%Occidental Petroleum's analyst price target saw a modest uptick to approximately $50.21 per share, as analysts balanced mixed updates to future expectations for margins, revenue, and sector outlooks that support their revised valuations.
Analyst Commentary
Recent updates from Street research present a nuanced outlook on Occidental Petroleum, as analysts adjust their targets based on evolving macro trends and company developments. Their views consider both the supportive elements for valuation and the uncertainties that may challenge future performance.
Bullish Takeaways- Several analysts note that the sale of Occidental's chemical business, OxyChem, provides an immediate boost to balance sheet strength and accelerates progress toward the company's debt reduction goals.
- Expected after-tax proceeds from the transaction are anticipated to facilitate continued cash returns to shareholders and enhance financial flexibility for future investments.
- Bullish analysts point to positive sector execution, with companies in the space trending well on operational efficiencies and cost management. This may help offset some macro pressures.
- Upward price target revisions, though modest, reflect optimism around balance sheet normalization and value creation opportunities stemming from recent portfolio actions.
- Bears emphasize that the proceeds from the OxyChem sale, though significant, came in slightly below prior market expectations. This may temper upside for valuation.
- Some analysts express caution regarding the dilutive impact of the OxyChem deal on key financial metrics, particularly in comparison with large-cap peers.
- There is ongoing concern about the oil macro environment, which "still doesn't feel great" and could weigh on sector sentiment and future returns.
- Outstanding preferred equity obligations are seen as continuing to constrain shareholder returns and presenting challenges for further value expansion.
What's in the News
- Berkshire Hathaway is reportedly close to reaching a $10 billion agreement to purchase Occidental Petroleum's petrochemical unit. The transaction could be finalized within days (The Wall Street Journal).
- Occidental Petroleum has been in discussions to sell its OxyChem division for around $10 billion. This would be the company's largest divestment to date (The Financial Times).
- The potential sale of OxyChem comes as Occidental continues its efforts to reduce its significant debt load, which is currently about $24 billion (The Financial Times).
Valuation Changes
- Consensus Analyst Price Target has risen slightly from $49.91 to $50.21 per share.
- The discount rate has decreased modestly from 7.25% to 7.16%.
- Revenue growth expectations have fallen significantly, shifting from an increase of 1.63% to a decrease of 1.82%.
- Net profit margin is now projected higher, rising from 7.76% to 9.41%.
- Future P/E has declined from 31.62x to 29.69x.
Disclaimer
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