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Shares of Occidental Rise After Company Swung to Profit; Target Price $60

U.S. shale producer Occidental Petroleum swung to profit in the fourth quarter on higher revenue, thanks to higher energy prices.

The oil and gas producer said adjusted earnings of $1.48 per share, beating the Wall Street consensus estimates of $1.04 per share. The company reported a profit of $1.34 billion, or $1.37 per share.

That was better compared to a loss of $1.31 billion, or $1.41 per share, seen in the same period a year ago. Occidental said its revenue surged to $8.01 billion, up from $3.35 billion in the same period last year.

Oil and gas pre-tax income on continuing operations for the fourth quarter was $2.1 billion, compared to pre-tax income of $1.5 billion for the third quarter of 2021.

Occidental Petroleum stock rose over 1.5% to $39.52. The stock rose over 34% so far this year after surging more than 67% in 2021.

Analyst Comments

Occidental Petroleum (OXY) provided a refreshing update on a return of capital program that includes a new $3bnbuyback (10% of market), a 1.3% fixed dividend and a $20bn absolute debt target that inevitably progresses the mission towards investment grade. 4Q EBITDAX beat on chems/midstream that carries over into FY22 while production and capex guidance were line with corp over rage driven by low-carbon venture spend,” noted David Deckelbaum, equity analyst at Cowen.

Occidental Petroleum Stock Price Forecast

Thirteen analysts who offered stock ratings for Occidental Petroleum in the last three months forecast the average price in 12 months of $46.33 with a high forecast of $60.00 and a low forecast of $34.00.

The average price target represents a 19.04% change from the last price of $38.92. Of those 13 analysts, nine rated “Buy”, three rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley’s base target price was $213 with a high of $474 under a bull scenario and $34 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the biotechnology company’s stock.

“Compelling risk-reward. Rebounding margins and strong FCF allowed Occidental Petroleum (OXY) to continue making good progress on debt reduction with its high-quality upstream assets and above-average FCF/equity yield (although FCF/EV still lags peers),” noted Devin McDermott, Equity Analyst And Commodities Strategist at Morgan Stanley.

“High-quality assets and differentiated exposure to a low carbon future. In addition to operating high-quality upstream assets, Occidental Petroleum (OXY) has achieved peer-leading emission reductions and maintains investments in low carbon technologies.”

Several analysts have also updated their stock outlook. Credit Suisse raised the target price to $35 from $33. Susquehanna lifted the price target to $46 from $41. Piper Sandler upped the target price to $44 from $43. Citigroup increased the price objective to $40 from $38.

Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong buying opportunity.

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This article was originally posted on FX Empire