Occidental Petroleum Gains on Stifel’s Upgrade to ‘Buy’
2022.04.06 19:16
By Dhirendra Tripathi
Investing.com – Occidental Petroleum (NYSE:OXY) stock traded 2% higher Wednesday, a day after Stifel upgraded it to ‘buy’ with a 12-month target of $84, more than 43% higher than the high of $58.52 so far in today’s session.
Even after more than a 120% rise in the last year due to record-high crude prices, Stifel analyst Michael Scialla believes the stock is attractively priced owing to an under-appreciated low carbon business.
The stock has attracted much attention lately after billionaire Warren Buffett came to acquire more than 13% of the company.
“An emerging low carbon business centered around direct air capture is largely underappreciated, in our view, due to its reliance on voluntary and compliance offset markets for hard to abate emissions and the consensus opinion that it will generate low returns,” he wrote in the report, according to StreetInsider.
According to Scialla, the pace of offset market expansion could surprise investors while the improvement in enhanced oil recovery resources and margins positively impacts direct air capture economics.
A rapidly deleveraging balance sheet and share repurchase program should also support the stock, he wrote.
