Occidental Petroleum Corporation (NYSE:OXY) Analysts Just Slashed This Year's Estimates

Today is shaping up negative for Occidental Petroleum Corporation (NYSE:OXY) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following this downgrade, Occidental Petroleum's seven analysts are forecasting 2024 revenues to be US$27b, approximately in line with the last 12 months. Statutory earnings per share are supposed to shrink 7.7% to US$3.44 in the same period. Previously, the analysts had been modelling revenues of US$30b and earnings per share (EPS) of US$3.85 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

Check out our latest analysis for Occidental Petroleum

Analysts made no major changes to their price target of US$71.52, suggesting the downgrades are not expected to have a long-term impact on Occidental Petroleum's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.9% by the end of 2024. This indicates a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.2% per year. It's pretty clear that Occidental Petroleum's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Occidental Petroleum.

Worse, Occidental Petroleum is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about Occidental Petroleum's balance sheet by visiting our risks dashboard for free on our platform here.

We also provide an overview of the Occidental Petroleum Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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