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Occidental Petroleum (OXY) Flat As Market Sinks: What You Should Know

Zacks Equity Research

Occidental Petroleum (OXY) closed at $45.50 in the latest trading session, marking no change from the prior day. This change was narrower than the S&P 500's daily loss of 0.84%. Meanwhile, the Dow lost 0.53%, and the Nasdaq, a tech-heavy index, lost 1.47%.

Prior to today's trading, shares of the oil and gas exploration and production company had gained 8% over the past month. This has lagged the Oils-Energy sector's gain of 9.82% and outpaced the S&P 500's gain of 5.2% in that time.

Investors will be hoping for strength from OXY as it approaches its next earnings release. On that day, OXY is projected to report earnings of $0.60 per share, which would represent a year-over-year decline of 66.1%. Meanwhile, our latest consensus estimate is calling for revenue of $5.06 billion, down 18.05% from the prior-year quarter.

OXY's full-year Zacks Consensus Estimates are calling for earnings of $2.85 per share and revenue of $20.92 billion. These results would represent year-over-year changes of -43.11% and +10.78%, respectively.

Any recent changes to analyst estimates for OXY should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 6.48% lower within the past month. OXY currently has a Zacks Rank of #3 (Hold).

Digging into valuation, OXY currently has a Forward P/E ratio of 15.97. Its industry sports an average Forward P/E of 15.78, so we one might conclude that OXY is trading at a premium comparatively.

Investors should also note that OXY has a PEG ratio of 3.19 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Oil and Gas - Integrated - United States industry currently had an average PEG ratio of 2.06 as of yesterday's close.

The Oil and Gas - Integrated - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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