Occidental Petroleum Stock Under Pressure Despite Buffett’s Continued Confidence

Occidental Petroleum (OXY) continues to face market headwinds as its stock trades around $51, significantly below Warren Buffett’s average purchase price of $53. The energy giant’s shares have shown mixed performance in recent trading sessions, dipping 0.7% even as broader markets gained ground.

The company’s recent performance has caught investors’ attention, with a notable 6.8% surge over the past month. This uptick comes amid several significant developments that could shape OXY’s future trajectory. Most prominently, the company’s $12 billion acquisition of CrownRock, L.P., announced in late 2023, has added premium Permian Basin assets to its portfolio, leading to an immediate boost in free cash flow and a 22% dividend increase.

However, analysts maintain a cautious stance. Zacks Research recently revised their Q2 2025 earnings estimates downward, now expecting earnings per share of $0.77, reduced from their previous forecast of $0.80. The consensus estimate for Occidental’s current full-year earnings stands at $3.35 per share, reflecting ongoing concerns about the company’s near-term performance.

The company’s financial metrics present a mixed picture. Trading at a price-to-earnings ratio of 13.92 and offering a dividend yield of 1.71%, OXY maintains relatively strong fundamentals. The company’s market capitalization currently stands at approximately $44.79 billion, with the stock trading well below its 52-week high of $71.12.

Looking ahead, Occidental plans to announce its fourth quarter 2024 financial results after market close on Tuesday, February 18, 2025, followed by a conference call on February 19. This upcoming earnings report will be crucial for investors seeking clarity on the company’s operational performance and strategic initiatives.

Institutional investors, particularly Warren Buffett’s Berkshire Hathaway, maintain significant positions in OXY. Berkshire Hathaway owns approximately 27.3% of the company, demonstrating Buffett’s continued confidence in Occidental’s long-term prospects despite current market volatility.

For long-term investors, Occidental’s fundamentals remain compelling. The company reported net proved reserves of nearly 4 billion barrels of oil equivalent at the end of 2023, with net production averaging 1,234 thousand barrels of oil equivalent per day. This robust operational base, combined with strategic acquisitions and focus on reducing emissions, positions OXY as a significant player in the evolving energy landscape.