Does Improved Production and Asset Sales Shift the Long-Term Outlook for Occidental (OXY)?

• Occidental Petroleum recently reported its third-quarter 2025 results, confirming higher-than-expected production and raising fourth-quarter production guidance to a midpoint of 1.46 million barrels of oil equivalent per day, driven by strong domestic asset performance despite planned maintenance at Al Hosn.
• An important insight is that, alongside reaffirmed dividends and progress on major asset sales to reduce debt, Occidental remains graded as undervalued compared to peers even as earnings estimates are revised lower.
• We'll examine how the improved production outlook, amid ongoing asset sales, may reshape Occidental's investment narrative and future cash flows.

Find companies with promising cash flow potential yet trading below their fair value.

Occidental Petroleum Investment Narrative Recap

To own shares of Occidental Petroleum, you need to believe that the company's strong domestic oil and gas operations and growing focus on new technologies like carbon capture can overcome ongoing pressure from commodity price swings, debt loads, and margin challenges. The recent boost in fourth-quarter production guidance affirms operational momentum, but does not materially offset continuing concerns about oil price volatility, the most immediate catalyst for performance, and the risk of earnings weakness if prices trend lower.

The announcement that stands out alongside the updated production outlook is the reaffirmation of Occidental's regular quarterly dividend at US$0.24 per share. This continued shareholder return, despite weaker earnings and margin declines, highlights ongoing confidence in the company’s cash flow and supports the near-term investment case, but also brings into focus the balance sheet pressures that remain if energy markets soften.

By contrast, those same stable dividends could become harder to maintain if oil prices fall sharply and push debt metrics beyond comfort levels, an important consideration investors should be aware of as...

Read the full narrative on Occidental Petroleum (it's free!)

Occidental Petroleum's outlook anticipates $29.0 billion in revenue and $3.7 billion in earnings by 2028. This scenario is based on annual revenue growth of 2.2% and a $2.0 billion increase in earnings from current levels of $1.7 billion.

Uncover how Occidental Petroleum's forecasts yield a $49.91 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Private investors in the Simply Wall St Community set fair value for Occidental Petroleum between US$31.19 and US$67.60, from 26 individual estimates. While production gains excite some, the risk from oil market volatility continues to shape performance expectations among these market participants.

Explore 26 other fair value estimates on Occidental Petroleum - why the stock might be worth as much as 59% more than the current price!

Build Your Own Occidental Petroleum Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Occidental Petroleum research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Occidental Petroleum research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Occidental Petroleum's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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