Occidental Petroleum (NYSE:OXY) rose Tuesday in price after Goldman Sachs upgraded it to buy from neutral. The Wall Street firm said the upgrade came after the stock’s recent underperformance, adding that the current valuation is difficult to reconcile with the quality of the underlying assets and cash flow power through an entire economic cycle.
The company is expected to release its 4Q 2022 financial results on February 28. As a result of lower oil, natural gas, and LNG prices, some experts expect OXY’s 4Q 2022 financial result to be weaker than in 3Q 2022. Also, energy prices are expected to continue decreasing in 2023.
On the other hand, the U.S. is expected to remain the world’s leading source of supply growth, and crude oil and natural gas production in the Permian Basin is still increasing. Thus, despite lower commodity price realizations, OXY’s production volumes will remain high. The company is financially healthy and can remain profitable with the current energy prices as oil prices are still relatively high. Occidental Petroleum Corporation stock is a hold.
According to IEA’s January 2023 oil market report , as a result of the sudden reopening of China, the global oil demand is expected to rise by 1.9 mb/d to a record 101.7 mb/d. According to EIA’s short-term energy outlook , China’s oil consumption is projected to increase continuously in the following quarters.
OXY shares gained 80 cents, or 1.2%, to $65.56.