1 day ago
Goldman Sachs Raises Occidental Petroleum Target to $69
Goldman Sachs now thinks Occidental Petroleum’s shares could be worth more than it previously expected.
It raised its price target from $63 to $69 and changed its rating from Neutral to Buy.
Goldman believes Occidental could bring in an extra $4 billion in cash by 2030 through improvements to its business.
Occidental has also been paying down debt, which fell to $11.8 billion in the second quarter.
The company reported strong cash flow and production during that quarter.
Its chief executive says the company is focusing on using money carefully and making operations more efficient.
Oil prices can change, and the company still needs to show that it can keep improving and reducing debt.
Goldman’s price target is an estimate, not a promise.
Occidental’s next quarterly results were expected in November.
Goldman Sachs upgraded Occidental Petroleum from Neutral to Buy and raised its price target from $63 to $69.
Analyst Neil Mehta said Occidental’s initiatives could generate $4 billion in additional cash flow by 2030.
Occidental reduced principal debt by $1.9 billion to $11.8 billion in the second quarter and is targeting further reductions.
The company reported $5.1 billion in second-quarter operating cash flow and production of 1.433 million barrels of oil equivalent per day.
Occidental’s third-quarter results were scheduled for release after the U.S. market closed on November 9, followed by an earnings call on November 10.
- Who
- Goldman Sachs and Occidental Petroleum; the upgrade was made by Goldman analyst Neil Mehta.
- What
- Goldman Sachs upgraded Occidental from Neutral to Buy and raised its price target from $63 to $69.
- Where
- The report concerns Occidental Petroleum, a U.S.-based oil and gas producer; the article cites the U.S. market schedule for its upcoming results.
- When
- The upgrade was reported on Thursday; Occidental’s third-quarter results were scheduled for November 9, with an earnings call on November 10.
- Why
- Goldman cited potential cash-flow gains, debt reduction, operational improvements, dividend-growth potential, and Occidental’s enhanced oil recovery approach.
Bullish outlook
Risks and uncertainty
Occidental’s prospects
Bullish outlook
Goldman Sachs sees attractive valuation and potential for additional cash flow, operational gains, and dividend growth, supporting its Buy rating and $69 target.
Risks and uncertainty
The $69 figure is an analyst forecast, not a guaranteed outcome; Occidental still needs to sustain cash generation and reduce debt.
Oil market outlook
Bullish outlook
The article describes Brent crude as remaining above $100 a barrel, providing a favorable backdrop for Occidental.
Risks and uncertainty
Oil prices remain vulnerable to changes in global supply and demand, as well as geopolitical developments.
Key facts
- Goldman Sachs rating
- Upgraded from Neutral to Buy
- Price target
- Raised from $63 to $69
- Potential additional cash flow
- $4 billion by 2030, according to Goldman Sachs
- Principal debt
- Reduced by $1.9 billion to $11.8 billion in the second quarter
- Second-quarter operating cash flow
- $5.1 billion from continuing operations
- Second-quarter production
- 1.433 million barrels of oil equivalent per day
- Next results and call
- Third-quarter results scheduled after the U.S. market close November 9; earnings call November 10
Quotes
Richard Jackson
Occidental Petroleum chief executive, who took the role in June.
“Our second quarter results demonstrate the strength of Oxy's resources and the competitive advantages that position us for continued value creation.”
easterneye.biz
Sources
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