Occidental Petroleum's Rocky Road: Analysts Remain Cautious Despite Recent Oil-Price Tailwinds
Houston-based energy giant Occidental Petroleum (NYSE: OXY), a fixture in the oil and gas industry since 1920, finds itself at a crossroads. The company's stock, despite a recent rally fueled by climbing oil prices, has failed to keep pace with both the broader market and its energy sector peers over the past year, leaving analysts largely on the sidelines.
Over the past 52 weeks, OXY shares have declined 7%, starkly underperforming the S&P 500's 15.2% gain. Even the benchmark Energy Select Sector SPDR ETF (XLE) has outpaced it, rising 12.6%. The story in 2026 has been one of catch-up: OXY is up 10.5% year-to-date, a move largely attributed to West Texas Intermediate (WTI) crude oil hitting a 4.25-month high in late January. On January 29, a 4% jump in crude prices propelled OXY shares more than 1% higher.
Beneath the surface of this oil-price-driven momentum, however, fundamentals present a mixed picture. The company's Q3 2025 earnings report in November revealed a year-over-year decline in both revenue, which fell to $6.6 billion, and adjusted earnings per share, which came in at $0.64. While it managed to beat bottom-line estimates—a feat it has accomplished for four consecutive quarters—the overall trend has prompted caution. Analysts project a significant 39% year-over-year drop in adjusted EPS for the full fiscal year 2025.
This caution is reflected in Wall Street's consensus. Currently, OXY carries a "Hold" rating. Among 26 analysts surveyed, the breakdown includes four "Strong Buys," one "Moderate Buy," a substantial 16 "Holds," and five "Strong Sells." Notably, the bearish contingent has grown, with "Strong Sell" recommendations increasing from three to five over the last three months. In a recent note, Piper Sandler analyst Mark Lear maintained a "Neutral" stance, though he raised his price target modestly to $47.
The average price target of $48.69 suggests a modest 7.2% upside from current levels, while the street-high target of $64 implies more bullish scenarios remain on the table. The divergence in targets underscores the central debate: whether Occidental can translate volatile commodity gains into sustained financial performance and shareholder returns, or if it remains overly exposed to the cyclical swings of the oil market.
Market Voices: Investor Sentiment on OXY
Michael Rourke, Portfolio Manager at Horizon Capital: "The recent price action is purely macro-driven. Until Occidental demonstrates it can consistently grow cash flow and improve its balance sheet independent of WTI's daily moves, the 'Hold' rating is justified. The chemical segment provides some diversification, but the core driver is still hydrocarbons."
Lisa Chen, Independent Energy Analyst: "The consistent ability to beat EPS estimates is being overlooked. This management team executes in challenging environments. With their focus on carbon capture initiatives (like DAC) alongside the core business, they're positioning for multiple energy futures. The current price offers a compelling entry point for patient investors."
David Feldstein, Editor at 'The Contrarian Investor' Newsletter: "This is a classic value trap. Five 'Strong Sells' don't appear out of nowhere. The earnings are collapsing, debt is still a millstone, and this so-called 'rally' is on fumes from a temporary oil spike. Wall Street's 'Hold' is just a polite way of saying 'Sell.' Anyone buying here is chasing momentum into a sector with a fundamentally broken long-term thesis."
Sarah Gibson, Retail Investor & Finance Blogger: "As a long-term holder, the volatility is exhausting. The dividend is decent, but the stock goes nowhere for years, then pops and drops with the news. I'm holding for the carbon capture potential, but it's hard to watch it lag XLE every single year. They need to give shareholders a clearer roadmap."
Disclosure: The author of this article did not hold positions in any securities mentioned at the time of publication. This content is for informational purposes only and was originally adapted from source material on Barchart.com.