On Thursday, Citi updated its stance on Occidental Petroleum (NYSE:OXY) shares, raising the price target to $69 from the previous $60, while maintaining a Neutral rating. The adjustment follows a review of the company's first-quarter performance and a recent disclosure about its production volumes.
Occidental Petroleum recently reported in an 8-K filing that its first-quarter Gulf of Mexico (GOM) volumes were affected by a third-party pipeline outage, resulting in a production of 90 million barrels of oil equivalent per day (mboe/d), which is below the guidance of approximately 111 mboe/d.
Despite this setback, the company is confident in its ability to increase production in the near future. The total production for the first quarter is still anticipated to meet the guidance, thanks to stronger performance from Occidental's Permian and DJ basin assets.
In light of the disclosed information, Citi has revised its model to account for the expected impact on the second-quarter GOM volumes. This has led to a decrease in the estimated cash flow per share (CFPS) for the first quarter to $2.23, down from the previous estimate of $2.34. This new CFPS estimate by Citi is below the consensus, which may not have fully considered the effects of the recent 8-K filing.
Investors and analysts will be looking forward to Occidental Petroleum's first-quarter earnings call for any updates to the full-year 2024 guidance. However, based on the current information, Citi expects Occidental to uphold its existing guidance for the year.
The company's ability to navigate through the pipeline outage and its confidence in ramping up production have been noted as key observations from the first-quarter catch-up session.
InvestingPro Insights
Occidental Petroleum (NYSE:OXY) has recently caught the attention of investors and analysts alike, with Citi raising the stock's price target post an assessment of the company's quarterly performance. To further enrich our understanding, let's consider some real-time data and insights from InvestingPro. With a market capitalization of $61.14B and a P/E ratio standing at 16.35, OXY appears to be a significant player in the market. The stock is trading near its 52-week high, which is supported by a strong three-month price total return of 20.74%. This performance is noteworthy for investors looking for stable returns.
From the InvestingPro Tips, it's interesting to note that OXY's stock generally trades with low price volatility, which suggests a certain level of predictability and stability in its stock price movements. Moreover, the company has demonstrated a commitment to shareholder returns, maintaining dividend payments for an impressive 51 consecutive years. This could be a compelling factor for income-focused investors. For those considering a deeper dive into OXY's financials and future prospects, InvestingPro offers additional tips, including analysts' predictions on profitability and a detailed analysis of the stock's performance metrics.
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