Goldman Sachs raises Occidental Petroleum price target to $69
Goldman Sachs has upgraded its stance on Occidental Petroleum, shifting from Neutral to Buy and raising its price target from $63 to $69. The bank's analyst Neil Mehta highlighted Occidental's potential to generate an additional $4 billion in cash flow by 2030, driven by operational efficiencies and debt reduction efforts.
Occidental has made significant progress in reducing its principal debt, cutting it from $13.7 billion to $11.8 billion. The company aims to further decrease its debt burden while improving its oil and gas operations. Goldman Sachs noted that Occidental's approach to enhanced oil recovery and its attractive valuation at current levels support a more optimistic outlook.
The upgrade comes after Occidental reported strong second-quarter results, including adjusted earnings per share of $2.40, up from $0.26 a year earlier. The company's global production reached 1.433 million barrels of oil equivalent per day, exceeding its guidance. Occidental's CEO, Richard Jackson, emphasized the company's focus on capital efficiency and deleveraging.
Goldman's $69 price target reflects a 9.5% increase from its previous target of $63. The bank's thesis is not solely based on higher oil prices but also on Occidental's advanced recovery capabilities and continued debt reduction. The next major test for Occidental will be its third-quarter results, due on November 9.