UBS reiterates Neutral rating on Occidental Petroleum stock ahead of Q2 results
Investing.com
Published Jul 15, 2025 10:26AM ET
Investing.com - UBS maintained its Neutral rating and $38.00 price target on Occidental Petroleum (NYSE:OXY) ahead of the company's second-quarter 2025 earnings report, scheduled for August 6. According to InvestingPro analysis, the company appears undervalued at its current market capitalization of $43.87 billion, with shares trading at 16.79x earnings.
The investment firm updated its estimates to reflect earnings considerations, including Occidental's lowered Gulf of America production outlook and higher effective tax rate guidance for the quarter.
UBS forecasts that Occidental's Permian Basin operations will remain strong in the second quarter of 2025, which should partially offset weakness in the Gulf of America region.
The firm noted that Occidental Petroleum did not announce any large-scale divestitures during the quarter, which impacts the company's progress toward its debt reduction goals.
UBS indicated that Occidental still needs to execute on its debt reduction targets before the firm would expect positive sentiment to shift around the stock.
In other recent news, Occidental Petroleum has been the subject of various analyst evaluations and strategic developments. JPMorgan raised its price target for Occidental to $48, though it anticipates an "underwhelming" second-quarter 2025 update, forecasting earnings per share of $0.24, below the Street estimate of $0.34. Wells Fargo also adjusted its outlook, lowering the price target to $46 due to a higher share count and lower Gulf of Mexico production, while reducing earnings per share estimates for the second quarter to $0.12. Mizuho, however, increased its price target to $65, citing strong shale assets, despite projecting a miss on consensus EBITDA estimates by 8% for the second quarter.
Occidental Petroleum is also exploring a joint venture with ADNOC's XRG to develop a Direct Air Capture facility in South Texas, aiming to capture 500,000 tonnes of carbon dioxide annually. This strategic agreement aligns with prior discussions on carbon capture projects, with XRG considering an investment of up to $500 million. The U.S. Department of Energy has committed up to $650 million to support the development of the South Texas DAC Hub. Occidental has also provided an update on second-quarter earnings considerations, although no specific financial figures were disclosed in its recent SEC filing. These developments reflect Occidental's focus on carbon management and its strategic initiatives in the energy sector.
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