Occidental Petroleum may be undervalued with poor growth indicators, but the 27 analysts following the company give it an rating of hold. Their target prices range from $51.0 to $89.0 per share, for an average of $62.14. At today's price of $49.48, Occidental Petroleum is trading -20.37% away from its average target price, suggesting there is an analyst consensus of strong upside potential for the stock.
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. Based in Houston, TX, the Large-Cap Energy company has 12,570 full time employees. Occidental Petroleum has provided a 1.7% dividend yield over the last 12 months.
Occidental Petroleum has a trailing twelve month P/E ratio of 13.6, compared to an average of 13.62 for the Energy sector. Considering its EPS guidance of $3.16, the company has a forward P/E ratio of 15.7.
On the other hand, the market is potentially undervaluing Occidental Petroleum in terms of its book value because its P/B ratio is 1.76. In comparison, the sector average P/B ratio is 1.86. The company's shares are currently -5.9% above their Graham number, which suggests that they are not trading at a fair value in terms of earnings and net assets.
If analysts are giving the stock a bad rating, it's likely that they are looking beyond simple valaution metrics and attempting to forecast the company's growth potential. For example, Occidental Petroleum has narrow margins as you can see in the financial summary below.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $15,560 | $20,911 | $17,809 | $25,956 | $36,634 | $28,257 |
| Operating Margins | 36% | 2% | -88% | 14% | 39% | 23% |
| Net Margins | 27% | -5% | -83% | 9% | 36% | 17% |
| Net Income (M) | $4,131 | -$985 | -$14,831 | $2,322 | $13,304 | $4,696 |
| Net Interest Expense (M) | $389 | $1,066 | $1,424 | $1,614 | $1,030 | $945 |
| Depreciation & Amort. (M) | $3,977 | $6,140 | $8,097 | $8,447 | $6,926 | $6,865 |
| Diluted Shares (M) | 763 | 810 | 919 | 959 | 100 | 961 |
| Earnings Per Share | $5.39 | -$1.22 | -$17.06 | $1.58 | $12.4 | $3.9 |
| EPS Growth | n/a | -122.63% | -1298.36% | 109.26% | 684.81% | -68.55% |
| Avg. Price | $63.53 | $46.16 | $18.26 | $27.1 | $52.46 | $49.41 |
| P/E Ratio | 11.76 | -37.84 | -1.07 | 16.73 | 3.91 | 11.71 |
| Free Cash Flow (M) | $2,694 | $1,008 | $1,420 | $7,564 | $12,313 | $6,038 |
| CAPEX (M) | $4,975 | $6,367 | $2,535 | $2,870 | $4,497 | $6,270 |
| EV / EBITDA | 5.85 | 10.81 | -6.65 | 4.29 | 3.22 | 4.72 |
| Total Debt (M) | $10,516 | $38,639 | $36,267 | $29,617 | $19,835 | $19,738 |
| Net Debt / EBITDA | 0.78 | 5.48 | -4.5 | 2.21 | 0.9 | 1.38 |
| Current Ratio | 1.34 | 1.15 | 1.07 | 1.23 | 1.15 | 0.92 |
