Occidental Petroleum Corporation (OXY), headquartered in Houston, Texas, acquires, explores, and develops oil and gas properties. Valued at $45.1 billion by market cap, the company also manufactures and markets a variety of basic chemicals, vinyls and performance chemicals.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and OXY perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the oil & gas E&P industry. OXY's strength lies in its significant reserve base and production capabilities. With 4 billion barrels of oil equivalent in net proved reserves and a daily production average of 1,234 thousand barrels of oil equivalent, the company holds a strong position in the energy sector.
Despite its notable strength, OXY slipped 31.9% from its 52-week high of $71.19, achieved on Apr. 12. Over the past three months, OXY stock declined 4.3%, underperforming the SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP)9% gains during the same time frame.
In the longer term, shares of OXY dipped 18.8% on a YTD basis and fell 15.1% over the past 52 weeks, considerably underperforming XOP’s YTD gain of 1% and 4.5% returns over the last year.
To confirm the bearish trend, OXY has been trading below its 50-day and 200-day moving averages since mid-July, with slight fluctuations.
OXY's decline in performance can be linked to its acquisition of CrownRock and the subsequent decrease in oil prices. The company has also taken measures to address its debt by selling non-core assets, such as its interest in Western Midstream.
On Nov. 12, OXY shares closed down more than 1% after reporting its Q3 results. Its adjusted EPS of $1 topped Wall Street expectations of $0.80. The company’s revenue was $7.2 billion, falling short of Wall Street forecasts of $7.4 billion.
In the competitive arena of oil & gas E&P, Diamondback Energy, Inc. (FANG) has taken the lead over OXY, showing resilience with a 5.7% uptick on a YTD basis and 9.6% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on OXY’s prospects. The stock has a consensus “Moderate Buy” rating from the 24 analysts covering it, and the mean price target of $61.56 suggests a potential upside of 27% from current price levels.
