By Dhirendra Tripathi
Investing.com – Stocks of Occidental Petroleum (NYSE:OXY) and Chevron (NYSE:CVX) traded 5.5% and 3% lower, respectively, Monday after Morgan Stanley downgraded them citing valuation concerns.
Both are also mirroring the weakness in global crude oil prices.
Oil prices fell over $9 a barrel today as investors pinned hopes on talks between Ukraine and Russia ending their conflict, while a surge in Covid-19 cases in China spooked the markets.
U.S. crude fell more than $9 to go below $100 a barrel today. The last time it was below that level was on March 1. It later traded at $101.60, down 7%.
Brent was down by 6.7% at $105 a barrel at 1155 ET amid efforts by Western powers to persuade Saudi Arabia to increase its output.
The stocks were downgraded to equal-weight from overweight at Morgan Stanley (NYSE:MS). Analyst Devin McDermott sees Occidental at $52, $3 below its current price at 1155 ET. Occidental shares have soared over 89% in the last year. In the same period, Chevron is up over 53% compared to 6.6% gains in the S&P 500. Both have outperformed their peers by a margin.
McDermott kept his target for Chevron unchanged at $166, according to The Fly.