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Research Alert: CFRA Lifts View On Shares Of Occidental Petroleum Corporation To Hold From Sell

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Our 12-month target of $56, up $14, reflects relative valuation and our DCF models. We apply a 6x multiple of EV to est. '27 EBITDA, above OXY's historical forward average, yielding a value of $49/share. A stronger multiple is reasonable given recent balance sheet improvement. Our DCF model, using medium-term FCF growth of 4%, terminal growth of 2.0%, and a WACC of 6.7%, yields intrinsic value of $63 per share. We lift our 2026 EPS estimate by $3.48 to $4.88, and 2027's by $1.23 to $2.97. OXY's net debt to capital ratio now stands at 25%, in line with E&P peers, and finally ending seven years of elevated debt ratios. We think OXY still has good growth potential in the Permian Basin on the liquids side of the ledger, but its natural gas business still faces headwinds from congestion in takeaway capacity. CEO Vicki Hollub is retiring on June 1, but current COO (a long-time OXY veteran) is stepping in, which we see as a plus given his long tenure and experience in the Permian.

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