Occidental Petroleum Corporation (OXY), headquartered in Houston, Texas, is an energy company that acquires, explores, develops and produces oil and natural gas. With a market capitalization of $40.6 billion, the company also manufactures and markets a range of essential chemicals, further diversifying its presence in the energy and industrial sectors.
Shares of this energy company have lagged the broader market by a considerable margin over the past 52 weeks. OXY has declined 17.9% over this period, while the broader S&P 500 index ($SPX) has gained 17.7%. Additionally, on a year-over-year basis, the stock is down 16.6%, compared to SPX’s 16.6% rally.
To narrow the focus, OXY has also underperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) with a decline of 3.7% over the past 52 weeks and a decline of 4.2% year over year.
On August 6, Occidental Petroleum posted mixed second-quarter earnings results and its shares rose 2.5% in the following trading session. On the negative side, primarily due to lower oil and gas net sales, the company’s overall revenue declined 6.1% year over year to $6.5 billion, missing consensus estimates by a slight margin. Meanwhile, its adjusted EPS of $0.39 also fell a notable 62.1% from the prior-year quarter, but beat analysts’ expectations by 39.3%, which could have cushioned the negatives. Adding to the rally, management revealed that $3 billion in debt has already been paid down this year through asset sales, healthy cash flow, and warrant exercise proceeds. This improved balance sheet could have further boosted investor confidence.
For the current fiscal year, which ends in December, analysts expect OXY’s EPS to decline 36.7% year over year to $2.19. The company’s track record of earnings surprises is promising. It surpassed consensus estimates in each of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is “Hold,” which is based on four “Strong Buy” ratings, one “Moderate Buy,” 17 “Hold” ratings, and three “Strong Sell” ratings.
This setup has changed since a month ago, with three analysts suggesting a “Strong Buy” rating and two recommending a “Strong Sell.”