On Thursday, Wells Fargo maintained its Equal Weight rating on Occidental Petroleum (NYSE: NYSE:OXY) and increased the stock's price target to $70.00, up from the previous $62.00. The adjustment follows a recent update to the oil price deck, despite a reduction in the first-quarter earnings per share (EPS) estimate for 2024 to $0.58 from the prior $0.67, which is below the consensus estimate of $0.63.
The revised EPS forecast takes into account adjustments to production, price realizations, operating expenses, and estimated effective tax rate (ETR), as detailed in the company's 8-K filing on April 10, 2024. The updated figures reflect lower production and weaker gas and natural gas liquids (NGL) realizations, which were partly balanced by improved crude realizations and a reduced ETR.
Occidental Petroleum issued an 8-K that provided updates on several key operational metrics. The company revised its Gulf of Mexico (GOM) production downward to 90 thousand barrels of oil per day (Mbopd) compared to the previous guidance of 107-115 Mbopd. This change was attributed to an ongoing outage at a third-party facility. However, Occidental's domestic and international volumes have remained within the initially provided guidance range.
Despite the lower production forecast for the Gulf of Mexico, Occidental Petroleum's full-year production is still expected to stay within the original guidance range provided by the company.
InvestingPro Insights
As Occidental Petroleum (NYSE: OXY) navigates through operational challenges and fluctuating market conditions, InvestingPro data and tips provide a snapshot of the company's current financial health and stock performance. With a market capitalization of $61.11 billion and a P/E ratio of 16.35, the company's valuation metrics reflect a market that has priced in its recent earnings. The stock's performance has been robust, with a 20.74% return over the last three months, indicating strong investor confidence.
InvestingPro Tips suggest that Occidental Petroleum's stock is currently in overbought territory, possibly as a result of trading near its 52-week high. This could be an important consideration for investors looking at the current price target increase by Wells Fargo. Additionally, the company's consistent dividend payments for 51 consecutive years demonstrate a commitment to shareholder returns, which may further bolster investor sentiment. For those seeking more in-depth analysis, there are 5 additional InvestingPro Tips available, which can be accessed with a subscription to the service.
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