Occidental Petroleum stock price target raised to $48 by JPMorgan

Investing.com - JPMorgan has raised its price target on Occidental Petroleum (NYSE:OXY) to $48.00 from $47.00 while maintaining a Neutral rating on the stock. Currently trading at $45.07, OXY appears undervalued according to InvestingPro analysis, with analyst targets ranging from $38 to $67.

The firm anticipates an "underwhelming" second-quarter 2025 update from Occidental, forecasting earnings per share of $0.24 compared to the Street estimate of $0.34. JPMorgan’s cash flow per share estimate of $2.36 sits approximately 6% below consensus expectations of $2.51. InvestingPro data shows OXY maintains a ’Fair’ overall financial health score and has maintained dividend payments for 52 consecutive years, with a current yield of 2.13%.

Production volumes for the second quarter are expected to reach 1,394 MBoe/d, including 715 MBo/d of oil production, slightly below consensus forecasts. The company’s Gulf of America production was impacted by third-party constraints, extended facility maintenance, and timing delays, resulting in volumes of 125 MBoe/d versus prior guidance of 126-134 MBoe/d. Get access to 6 more exclusive InvestingPro Tips and comprehensive analysis in our Pro Research Report, helping you make more informed investment decisions.

For Occidental’s chemical segment (OxyChem), JPMorgan estimates pre-tax income of $215 million, below company guidance of approximately $230 million. The midstream segment is expected to post a pre-tax loss of $67 million, slightly better than Occidental’s guidance of a $90 million loss.

JPMorgan forecasts capital expenditures of $2.07 billion for the second quarter, approximately 13% higher than the consensus estimate of $1.84 billion, noting that 55% of Occidental’s full-year capex budget is concentrated in the first half of 2025.

In other recent news, Occidental Petroleum has been the subject of several analyst assessments and strategic developments. Wells Fargo (NYSE:WFC) lowered its price target for Occidental Petroleum to $46, citing a higher share count and reduced production in the Gulf of Mexico, while maintaining an Equal Weight rating. In contrast, Mizuho (NYSE:MFG) raised its price target to $65, highlighting strong shale assets despite an anticipated miss in consensus EBITDA estimates for the second quarter of 2025. Occidental has also entered into a strategic agreement with ADNOC’s XRG to explore a joint venture for a Direct Air Capture facility in South Texas, aiming to capture 500,000 tonnes of carbon dioxide annually.

JPMorgan adjusted its price target for Occidental to $47, maintaining a Neutral rating, and noted the company’s efforts to reduce costs through improved drilling and frac efficiencies. Occidental plans to cut its capital expenditure by $200 million and operational expenses by $150 million in 2025. The company expects a slight increase in oil and gas output, with higher volumes in the Permian Basin and the resumption of Gulf of Mexico production. Additionally, Occidental is in the final stages of negotiations to extend its Block 53 contract in Oman, which could unlock significant resources at the Mukhaizna Field. These developments reflect Occidental’s ongoing strategic initiatives and operational adjustments.

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