OXY
Occidental Petroleum Corporation
$54.93
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 45.0% above fair value
You pay
$54.93
Bear
$1.67
Fair
$37.87
Bull
$86.16
Bear
$1.67
-97.0%
FCF $2874M × 8x
Fair
$37.87
-31.1%
FCF $4105M × 11x
Bull
$86.16
+56.9%
FCF $5336M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
18.7x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $64.92 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $37.87 per share.
Warnings
Debt per share ($22.09) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
If oil drops to $60/barrel, the stock could fall -98%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $64.92 (from 52 analysts). Our estimate is 64% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential