On Thursday, Raymond (NSE:RYMD) James reaffirmed its Outperform rating for Occidental Petroleum (NYSE:OXY), maintaining a $51.00 price target. The endorsement comes as the company demonstrates a strong commitment to reducing its debt. With current EBITDA of $13 billion and a FAIR Financial Health score according to InvestingPro, Occidental Petroleum has effectively lowered its debt by $6.8 billion since the third quarter of 2024, resulting in an approximate $370 million reduction in annual interest expenses.
The company’s efforts to improve its financial health have continued into the current year, with $2.3 billion in debt repaid year-to-date. This includes $0.5 billion in the first quarter of 2025 and a significant $1.8 billion in April. These repayments were bolstered by approximately $1.3 billion from asset divestitures completed in the first quarter of the year. The company has maintained dividend payments for an impressive 52 consecutive years, demonstrating long-term financial stability.
Occidental Petroleum’s strategic financial maneuvers have successfully eliminated all of its debt obligations due in 2025. This decisive action has paved the way for the company to address the remaining $284 million in debt that is scheduled for repayment over the next 14 months.
Looking ahead into 2025, Occidental Petroleum is placing a high priority on debt reduction and cash flow growth. The company aims to achieve this by reinvesting its earnings rather than pursuing share buybacks or preferred equity redemptions. This disciplined approach to financial management is expected to strengthen Occidental Petroleum’s position in the market and enhance shareholder value over the long term. According to InvestingPro analysis, the stock appears undervalued at current levels, with 10 analysts recently revising their earnings estimates upward. For detailed valuation metrics and more exclusive insights, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Occidental Petroleum Corporation’s shareholders have approved the executive compensation plan, with over 94% of votes in favor, indicating strong support for the company’s pay structure. The annual meeting also saw the election of ten board members and the ratification of KPMG as the independent auditor for 2025. Meanwhile, the Energy Department is considering cuts that could affect nearly $10 billion in clean-energy projects, potentially impacting Occidental Petroleum’s carbon capture initiatives. Analysts from UBS, Stephens, and Mizuho have revised their price targets for Occidental Petroleum, with UBS lowering it to $38, Stephens to $58, and Mizuho to $62, all maintaining a neutral or overweight rating. UBS noted potential challenges in cash generation due to financial obligations, while Stephens highlighted slightly above-consensus cash flow projections. Mizuho pointed out a potential 7% shortfall in EBITDA but recognized Occidental’s progress in deleveraging efforts. These developments reflect ongoing adjustments and strategic considerations for Occidental Petroleum amidst a fluctuating energy market and economic landscape.
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