Is Occidental Petroleum (OXY) Pricing Reflect Long Term Value After Mixed Multi Year Returns

If you are wondering whether Occidental Petroleum’s current share price really reflects its underlying value, you are not alone. This article is designed to help you weigh what you are paying against what you are getting. The stock last closed at US$46.07, with recent returns of a 1.3% decline over 7 days, 7.9% over 30 days, 8.7% year to date, a 2.0% decline over 1 year, a 20.3% decline over 3 years, and 84.7% over 5 years. Taken together, this gives you a mixed picture of how the market has been reassessing it over different time frames. Recent headlines around Occidental have continued to focus on its position in the US energy sector and the attention it receives from high profile investors. This helps keep sentiment in focus for many retail holders. At the same time, ongoing discussions about capital allocation, balance sheet priorities and exposure to commodity price moves give important context to how investors think about risk and reward in the stock. On our checks, Occidental Petroleum currently scores 2 out of 6 on valuation, which you can see in detail at this valuation score. Next we will look at how different valuation methods judge the shares, as well as a more complete way to think about value that we will come back to at the end of the article.

Occidental Petroleum scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Occidental Petroleum Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes the cash Occidental Petroleum is expected to generate in the future and discounts those cash flows back to today to estimate what the whole business might be worth in dollar terms.

For Occidental, the latest twelve month free cash flow is about $4.40b. Analysts and model estimates project free cash flow figures into the future, including an estimate of $4.38b in 2030. Simply Wall St uses a 2 Stage Free Cash Flow to Equity model, where analyst estimates cover the nearer years and later years are extrapolated based on those patterns.

Combining all of those discounted cash flows gives an estimated intrinsic value of about $90.76 per share. Against the recent share price of $46.07, this model implies the stock trades at roughly a 49.2% discount, which indicates it is significantly undervalued according to this method.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Occidental Petroleum is undervalued by 49.2%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

OXY Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Occidental Petroleum.

Approach 2: Occidental Petroleum Price vs Earnings

For a profitable company like Occidental Petroleum, the P/E ratio is a straightforward way to relate what you pay per share to the earnings the business is currently generating. It helps you see how many dollars of price you are paying for each dollar of earnings.

What counts as a “normal” or “fair” P/E depends on how the market views the company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk tends to support a lower P/E.

Occidental currently trades on a P/E of 31.09x. That sits above the Oil and Gas industry average of 14.46x and also above the peer average of 23.91x. Simply Wall St’s Fair Ratio for Occidental is 21.77x, which is its proprietary view of what a more appropriate P/E could be, given factors such as the company’s earnings profile, industry, profit margins, market cap and risk characteristics.

The Fair Ratio offers a more tailored reference point than simple industry or peer comparisons, because it adjusts for company specific traits rather than treating all Oil and Gas companies as alike. Compared with the current 31.09x P/E, the 21.77x Fair Ratio suggests the shares trade at a richer multiple than this framework would imply.

Result: OVERVALUED

NYSE:OXY P/E Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Occidental Petroleum Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about Occidental Petroleum linked directly to your own forecast for revenue, earnings, margins and a Fair Value that you can compare with today’s price.

On Simply Wall St’s Community page, Narratives let you turn that story into numbers in a few guided steps, so you can see how your view of Occidental’s future feeds into a Fair Value that updates automatically when new news, earnings or guidance comes through.

That makes decisions more concrete, because you are not just reacting to headlines. You are checking whether your Fair Value still sits above or below the current price and using that gap as one input into when you might add, trim or hold.

For example, recent community Narratives on Occidental span Fair Values from about US$16.62 at the cautious end to about US$68.29 at the higher end. This shows how different views on future revenue growth, profit margins and risk can lead to very different conclusions even when everyone is looking at the same share price.

For Occidental Petroleum, here are previews of two leading Occidental Petroleum Narratives to make comparison easier:

🐂 Occidental Petroleum Bull Case

Narrative Fair Value: US$55.05

Gap to current price: about 16.3% below this fair value estimate

Revenue growth assumption: 4%

Views Occidental as an energy company that could pair its core Permian oil and gas operations with a growing carbon capture and storage business over the next decade. Emphasises continued attention on debt reduction, cash flow from chemicals and midstream, and the potential role of CCS in adding a second, less commodity sensitive revenue stream. Assumes that if CCS scales and becomes commercially viable, the market could be willing to pay higher valuation multiples than for a traditional oil and gas producer.

🐻 Occidental Petroleum Bear Case

Narrative Fair Value: US$16.62

Gap to current price: about 177.3% above this fair value estimate

Revenue growth assumption: 11.26% decline

Reflects the perspective of a holder whose portfolio is heavily concentrated in energy and who is weighing whether continuing to reinvest dividends into Occidental still fits their overall goals. Highlights that a large single stock position can be emotionally challenging, especially when outside advisers suggest trimming and reallocating into other assets. Uses a much lower fair value than the current share price, which implies concern that the position size and company specific risks may be too high compared with more diversified or income focused alternatives.

If you want to see how these ideas are built in full, you can read the complete narratives and compare them with your own view of Occidental before you make any decisions about the stock.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there’s more to the story for Occidental Petroleum? Head over to our Community to see what others are saying!

NYSE:OXY 1-Year Stock Price Chart

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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