Occidental Petroleum (OXY) is scheduled to release its financial results for the fourth quarter of 2024 on February 18. Wall Street analysts have forecasted earnings per share (EPS) of $0.68 and revenue of $6.98 billion. This marks a year-over-year decline of 8% in EPS and a 4.9% drop in revenue, as per data available.
Performance and Market Sentiment
Occidental Petroleum has faced significant challenges due to falling oil prices, resulting in a 15% loss in its stock value over the past year. Despite these market struggles, the company’s fundamentals and long-term growth strategies are still seen as strong by some investors.
Berkshire Hathaway Increases Stake in OXY
On February 12, Warren Buffett’s Berkshire Hathaway further strengthened its position in Occidental Petroleum, increasing its stake to 28.3%. The conglomerate bought an additional 763,017 shares of OXY, valued at $35.72 million, at an average price of $46.82 per share. This move demonstrates Berkshire’s continued confidence in Occidental’s future performance despite recent stock price declines.
Analyst Views Ahead of the Q4 Report
Ahead of Occidental’s Q4 report, analysts have provided varied opinions on the stock:
Leo Mariani, Roth MKM Analyst: Mariani reduced the price target from $56 to $54, maintaining a Neutral rating. He raised the 2025 oil price forecast to $71, though he highlighted a potential risk from increased supply due to OPEC’s production. However, this could be balanced by reduced exports from countries under sanctions like Iran and Russia.Neil Mehta, Goldman Sachs Analyst: Mehta downgraded Occidental from Neutral to Sell and lowered the price target from $54 to $45. His main concern lies in the company’s prioritization of debt reduction after its January 2024 acquisition of CrownRock. Mehta noted that this focus on reducing debt to $15 billion may delay any meaningful shareholder returns, particularly as OXY reported a total debt of $27.6 billion in Q3 2024.
Mehta also expressed concerns about OXY’s ability to perform during market downturns due to the lack of a robust stock buyback program to support the share price.
Options Traders Expect a 5.01% Stock Move
Based on Options tool, options traders are predicting a potential 5.01% move in OXY’s stock price immediately after the earnings report. This expected movement can go in either direction, depending on the financial results and market sentiment post-announcement.
Is OXY a Buy or a Sell?
Turning to Wall Street, Occidental Petroleum currently holds a consensus rating of Hold. The average price target is $59.07, which implies a potential upside of 23.27% from the current stock price.
Important Highlights:Key Dates: Occidental Petroleum’s Q4 earnings report is due on February 18, 2024.Stock Performance: OXY has lost over 15% in the past year, impacted primarily by falling oil prices.Berkshire Hathaway Stake: Warren Buffett’s Berkshire Hathaway now owns 28.3% of Occidental Petroleum, signaling confidence in the company’s long-term prospects.Debt Reduction Focus: OXY aims to reduce its debt from $27.6 billion (reported in Q3 2024) to $15 billion, potentially delaying significant shareholder returns.Analyst Opinions: Mixed, with a focus on the company’s debt strategy and market risks.Options Traders Expectation: A 5.01% stock movement post-earnings in either direction.
With mixed analyst ratings and potential volatility in the stock price, investors should closely monitor the company’s financial results and the broader oil market trends before making investment decisions.