Warren Buffett's investment in Occidental Petroleum highlights his strategy of buying undervalued stocks. Industry uncertainty and potential low oil prices may lead to reduced production. Despite current economic challenges, the energy sector's ability to adjust production quickly makes it a likely bargain investment idea.
In the latest trading session, Occidental Petroleum (OXY) closed at $49.36, marking a +1.09% move from the previous day.
OXY is almost fully valued despite the recent pullback as the stock loses its Warren Buffett premium, triggering its mixed prospects attributed to macro/ sector uncertainties. This is worsened by the upcoming supply normalization and moderating spot prices, as the OPEC+ gradually ramps up their production outputs through December 2026. OXY's CrownRock acquisition and increased capex are likely to boost production, albeit negated by the higher debts and lower free cash flows.
Zacks.com users have recently been watching Occidental (OXY) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
I give Occidental Petroleum Corporation a Buy rating. The company has an impressive free annual cash flow and high-quality earnings. Using a DCF model, the intrinsic value of Occidental is $65.04 per share, suggesting the stock currently trades at 26% below its intrinsic value.
Energy sector leads YTD S&P 500 performance; XLE up 300% over five years, showing resilience amid geopolitical risks and inflation. Occidental Petroleum (OXY) remains a buy; attractive valuation, high free cash flow, and ongoing debt reduction efforts despite recent mixed quarterly results. OXY's technicals are bearish, but support at mid-$40s and improving RSI offer potential; long-term support near $36.
Occidental Petroleum (OXY -1.35%) is a major player in the energy sector and is one of the United States' top oil and gas producers. After a banner year in 2022, Occidental strengthened its balance sheet and reduced its debt.
Occidental Petroleum stock crashed 22.5% over the last 12 months, underperforming its sector. Despite the stock's lower price, Occidental continues generating healthy profits, with high margins and returns on equity. The CrownRock acquisition has been weighing on results somewhat, but is not thesis-breaking.
Occidental Petroleum (OXY 1.45%) has slumped over the past year. Shares of the oil giant are down more than 20%.
Occidental Petroleum Co. NYSE: OXY is primarily recognized in the energy sector as a leading international oil and gas producer. It's notably been a growing position for the Oracle of Omaha as Berkshire Hathaway Co. NYSE: BRK.B raised its stake to 28% of the company in February 2025.
Occidental's strong presence in the Permian Basin and contribution from international assets are boosting its performance amid the adverse impact of fluctuating commodity prices.
Despite his investment expertise, Warren Buffett's top energy stock pick in the Berkshire Hathaway (NYSE: BRK.A) portfolio continues to struggle.