Why Occidental Petroleum Stock Is Under Pressure Friday Afternoon – Occidental Petroleum (NYSE:OXY)

Oil Collapse Pressures Occidental’s Profit Outlook

WTI crude plunged more than 14% to about $81 a barrel Friday morning and Brent fell 10% to roughly $89. Friday’s news is especially bearish for OXY because the company’s earnings power, cash flow profile and investor sentiment are tightly tied to crude prices.

When oil falls this sharply, the market immediately starts repricing expectations for Occidental’s upstream realizations, near-term revenue and free cash flow generation. Put simply, lower crude prices reduce the value of Occidental’s production, which can compress margins and weigh on the company’s earnings outlook.

With crude now headed for a second straight weekly loss and sitting more than $30 below March highs, traders are reassessing Occidental’s near-term upside.

OXY Earnings Outlook Points To A Softer Quarter

Following last quarter’s results, investors are now tracking the path toward the next reporting date on May 5.

EPS Estimate: 56 cents (Down from 87 cents YoY)

Revenue Estimate: $5.51 Billion (Down from $6.84 Billion YoY)

Valuation: P/E of 42.1x (Indicates premium valuation relative to peers)
Analyst Consensus On OXY Stays Neutral

Analyst Consensus & Recent Actions: The stock carries a Hold Rating with an average price target of $61.93. Recent analyst moves include:

UBS: Neutral (Raises Target to $67.00) (April 13)

Wells Fargo: Overweight (Raises Target to $72.00) (April 9)

Citigroup: Neutral (Raises Target to $67.00) (March 30)
OXY Shares Slide Friday Afternoon

OXY Stock Price Activity: Occidental Petroleum shares were down 6.59% at $53.12 at the time of publication on Friday, according to Benzinga Pro data.

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