Meta description: Occidental Petroleum stock (OXY) is trading around $42 with Wall Street price targets near $50 as the company sells OxyChem to Berkshire Hathaway, cuts debt, trims 2026 capex and leans on cash flow. Here’s the full picture as of December 6, 2025.
As of December 6, 2025, Occidental Petroleum Corp. (NYSE: OXY) is trading around $42–43 per share, roughly mid‑range in its 52‑week band of about $34.8 to $53.2, for a market capitalization of just over $42 billion. [1]
The share price reflects a year dominated by three big themes: a $9.7 billion sale of the OxyChem chemicals business to Berkshire Hathaway, a better‑than‑expected third quarter, and an aggressive push to reduce the heavy debt load built up after the Anadarko and CrownRock acquisitions. [2]
Despite those moves, Wall Street remains cautious. Most major analyst aggregators still rate OXY a “Hold”, but cluster their 12‑month price targets around $50 per share, implying mid‑teens to roughly 20% upside from current levels. [3]
Below is a detailed look at how Occidental’s stock stands today, what recent results and deals mean, and how professional analysts are framing the outlook into 2026.
Occidental Petroleum Stock Today: Price, Performance and Valuation
Occidental closed at $42.43 on December 5, 2025, with after‑hours trading nudging the quote to about $42.60. [4]
Key snapshot metrics:
- 52‑week range: roughly $34.8 – $53.2 [5]
- Market cap: about $42 billion [6]
- Average daily volume: near 10 million shares [7]
- Beta: around 0.9, meaning somewhat lower volatility than the broader market. [8]
Over the past 12 months, Occidental’s stock has lost roughly 10–18%, depending on the exact start date, while the S&P 500 is up mid‑teens and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) is down only low‑single digits. [9] In other words, OXY has underperformed both the market and its E&P peers.
On valuation, most data providers put Occidental at a trailing P/E ratio around 31x based on trailing 12‑month EPS of about $1.37, well above its 12‑month average P/E near 20x. [10] Enterprise‑value‑to‑EBITDA sits near 5.5–5.6x, in line with or slightly below many large upstream peers. [11]
That combination—high P/E but moderate EV/EBITDA—reflects both depressed accounting earnings (after a volatile commodity cycle) and the market’s focus on cash generation and balance‑sheet repair rather than rapid growth.
Q3 2025 Earnings: Higher Output, Strong Cash Flow, More Debt Reduction
Occidental’s third‑quarter 2025 results, released on November 10, were a key catalyst for the recent stabilization in the share price. [12]
From the company’s own release and subsequent coverage:
- Net income attributable to common shareholders:$661 million, or $0.65 per diluted share
- Adjusted income:$649 million, or $0.64 per share [13]
- Operating cash flow:$2.8 billion, and $3.2 billion before working‑capital changes
- Capital spending:$1.8 billion, plus $39 million from non‑controlling interests
- Free cash flow before working capital: around $1.5 billion [14]
- Total production:1,465 thousand barrels of oil equivalent per day (Mboed), above the high end of guidance, with especially strong output in the Permian basin. [15]
Reuters notes that Occidental beat Wall Street profit estimates, helped by higher production that offset lower realized oil prices. Average production of 1.46 million boe/d was up from 1.41 million boe/d a year earlier, partly thanks to the 2024 CrownRock acquisition, even though realized oil prices fell to about $64.78 per barrel from $75.33 in the prior year. [16]
Crucially for the equity story:
- Occidental repaid $1.3 billion of debt during Q3, reducing principal debt to $20.8 billion. [17]
- The company guided Q4 2025 production to 1.44–1.48 million boe/d, roughly in line with analyst expectations. [18]
The quarter reinforced the narrative that OXY is using a relatively benign $60‑plus oil environment to push down leverage, fund modest growth and maintain a growing dividend—all while positioning for the OxyChem divestiture.
OxyChem Sale and the Deleveraging Strategy
The single biggest strategic move of 2025 is Occidental’s agreement to sell its chemical subsidiary OxyChem to Berkshire Hathaway for $9.7 billion in cash.
According to Occidental and Berkshire’s joint announcement on October 2:
- The deal is an all‑cash transaction valued at $9.7 billion, subject to typical purchase‑price adjustments. [19]
- Closing is expected in Q4 2025, pending regulatory approvals and customary conditions. [20]
- Occidental will retain legacy environmental liabilities associated with the business but will no longer operate the chemicals segment. [21]
Multiple credit and equity research notes indicate that OXY plans to allocate roughly $6.5 billion of the proceeds toward debt reduction, targeting principal debt below $15 billion, a goal first laid out after the CrownRock acquisition. [22]
In parallel with the OxyChem sale, Occidental has been selling non‑core Permian and midstream assets:
- Since April 2025, the company has signed four divestiture agreements totaling about $950 million in proceeds, mainly from non‑core Permian upstream assets and Midland Basin gas‑gathering infrastructure. [23]
- Including earlier sales tied to the CrownRock deal, total divestitures since late 2023 are now around $4 billion.
- Since July 2024, OXY has repaid about $7.5 billion of debt, with an additional $580 million expected to be used for debt reduction once the Midland Basin transaction closes. [24]
Taken together, Q3 free cash flow, asset sales, and the pending OxyChem transaction are designed to move OXY from a $20.8 billion debt position toward the mid‑teens, materially improving leverage ratios.
Several independent analysts argue that this narrower, upstream‑focused Occidental—without OxyChem’s more stable but lower‑growth chemical earnings—should trade more like a pure E&P, but only if the deleveraging story plays out as promised. [25]
2026 Outlook: Flat Production, Lower Capex and a Focus on Cash
On November 11, one day after reporting Q3 results, Occidental provided 2026 guidance that effectively positions the company as a cash‑flow and balance‑sheet story, not a volume‑growth story.
Per Reuters’ summary of management’s comments:
- Production in 2026 is expected to be flat to up about 2%, led by unconventional Permian operations. [26]
- Capital expenditure is projected at $6.3–6.7 billion in 2026, down from around $7.1–7.3 billion expected for 2025. [27]
- Up to $400 million is earmarked for U.S. onshore projects (Permian and Rockies), with an extra $250 million directed to the Gulf of Mexico (“Gulf of America”) and Oman.
- Spending on the low‑carbon portfolio will be trimmed, reflecting the pressure of lower oil prices and the need to prioritize debt reduction. [28]
Occidental also reiterated that it remains committed to cutting debt built up from the 2019 Anadarko and 2024 CrownRock deals, while returning cash to shareholders via dividends and share buybacks. Management said it intends to be “opportunistic” with share repurchases and aims to resume redemption of Berkshire’s preferred shares in August 2029. [29]
GuruFocus summarized the outlook as a plan for stable volumes with modest growth and lower capex, which should enhance free cash flow but may limit near‑term production upside. [30]
In short, Occidental is choosing balance-sheet strength over aggressive volume growth for 2026.
Dividend and Shareholder Returns: A Growing but Modest Yield
Occidental’s dividend is back and growing, though still well below pre‑COVID levels.
Key details as of early December 2025:
- The Board has declared a regular quarterly dividend of $0.24 per share, payable January 15, 2026 to shareholders of record as of December 10, 2025. [31]
- At a share price around $42–43, that equates to an annualized dividend of $0.96 and a yield of about 2.2–2.3%. [32]
- The company has raised the dividend several times since 2021, from just $0.01 per quarter in 2021 to $0.24 in 2025, marking three consecutive years of dividend growth. [33]
Dividend‑focused site StockAnalysis estimates a payout ratio around 69–71% of earnings and notes a roughly 9% year‑over‑year increase in the dividend through 2025. [34]
Simply Wall St recently highlighted that OXY’s dividend:
- Represents about 62% of earnings and roughly 48% of free cash flow, levels they view as compatible with sustainability if earnings don’t collapse.
- Sits on top of rapid EPS growth—roughly 38% annually over the last five years, albeit off a low base. [35]
Their conclusion: the dividend looks reasonably well covered, though they flag several risk factors, including leverage and commodity dependence.
Share repurchases are currently supplemental rather than dominant; management stresses opportunistic buybacks while debt and preferred‑share obligations remain the priority. [36]
Berkshire Hathaway’s Giant Stake and the OxyChem Deal
Occidental’s story is inseparable from Berkshire Hathaway, which is both a major shareholder and a key counterparty.
According to regulatory filings and multiple news reports:
- Berkshire began building its stake in OXY in early 2022 and, after additional purchases in 2023 and early 2025, now owns roughly 28–30% of Occidental’s common stock, or about 265 million shares, worth around $11–13 billion at recent prices. [37]
- Berkshire also holds about $8.5 billion of 8% preferred stock and warrants to buy roughly 84 million more shares at just under $60 per share, tied to its 2019 financing of the Anadarko acquisition. [38]
- In 2022, U.S. regulators authorized Berkshire to buy up to 50% of Occidental’s outstanding shares, though Warren Buffett has repeatedly said he does not intend to take full control. [39]
The OxyChem deal further deepens the relationship:
- Berkshire is paying $9.7 billion in cash for OxyChem, in what several outlets describe as its largest deal since 2022 and potentially one of Buffett’s last major transactions. [40]
- Analysts at Fitch, Zacks and others note that Occidental intends to apply $6.5 billion of those proceeds toward debt reduction, sharply accelerating its deleveraging trajectory. [41]
From Occidental’s perspective, the arrangement looks like a “Buffett‑backed cleanup”: it sells a cyclical but relatively stable chemical asset at what looks like a fair multiple, uses the cash to slash debt, and tightens its strategic focus on oil and gas plus lower‑carbon initiatives such as direct air capture. [42]
For Berkshire, OxyChem becomes another industrial cash‑generator alongside Lubrizol, funded out of its enormous cash pile and levered to long‑term demand for basic chemicals. [43]
The market reaction to the OxyChem announcement was mixed: Occidental’s shares fell around 7% on the day, as investors digested the loss of a stable earnings stream but also the promise of a faster‑deleveraging path. [44]
Wall Street Forecasts: “Hold” Rating, but Double‑Digit Upside
Despite the heavy news flow, sell‑side opinion on OXY is surprisingly consistent: cautious but not bearish.
Consensus ratings and targets
- MarketBeat’s forecast page shows 23 analysts with an average 12‑month target of about $50.52, with a high of $64 and a low of $38. That implies roughly 19% upside from a recent price near $42.4, with a consensus rating of “Hold.” [45]
- MarketWatch reports a similar picture: an average target around $50.50 from 29 analysts, also translating to a “Hold” recommendation on average. [46]
- GuruFocus aggregates 24 analysts with an average target near $49.93, again implying roughly 19–20% upside, and an average brokerage recommendation of 2.7 on a 1–5 scale, where 1 is Strong Buy and 5 is Sell—squarely in Hold territory. [47]
A recent Barchart/FinancialContent article breaks down the ratings more granularly: 4 “Strong Buy,” 1 “Moderate Buy,” 17 “Hold,” and 3 “Strong Sell” among 25 analysts, underscoring how polarizing the stock has become. [48]
Recent price‑target moves
Several brokerages have updated their views following Q3 and the OxyChem announcement:
- Mizuho maintained an “Outperform” rating and raised its price target from $60 to $64, one of the Street‑high forecasts. [49]
- Piper Sandler kept a “Neutral” stance but cut its target from $50 to $47. [50]
- Susquehanna remains “Positive” but trimmed its target from $55 to $54. [51]
- Wells Fargo initiated coverage with an “Underweight” rating and a $42 target, near the current price. [52]
- J.P. Morgan and Scotiabank sit in the middle with Neutral/Sector Perform calls and targets around $47–50. [53]
In effect, optimists see mid‑$60s potential if the deleveraging story and oil prices cooperate, while skeptics anchor in the low‑$40s, reflecting concerns about leverage, valuation and macro risk.
Independent Analyses: From “Buy in Q4” to “Solid but Challenged”
Beyond the pure numbers, several research and commentary pieces paint a nuanced picture of Occidental’s prospects.
- A MarketBeat editorial explicitly argues that “Occidental Petroleum is a buy in Q4 2025,” not because its outlook is spectacular, but because Q3 results and the OxyChem sale affirm the original Berkshire investment thesis: better operational quality, rising free cash flow and falling net debt. The article notes that net debt has fallen by about 18% year‑on‑year and 10% sequentially, free cash flow in Q3 still ran around $1.5 billion, and the dividend yield near 2.3% leaves room for growth. [54]
- Barchart’s piece on analyst sentiment highlights that while OXY has underperformed the S&P 500 by almost 36 percentage points over the past year, it has beaten earnings expectations in each of the last four quarters, suggesting a pattern of conservative guidance and operational outperformance. [55]
- Simply Wall St’s recent dividend review concludes that the payout is well covered by both earnings and cash flow, but they also flag leverage and balance‑sheet quality as reasons for caution. [56]
- Several Seeking Alpha contributors describe Occidental as a “solid player facing key challenges” and emphasize that streamlined operations and lower capex are improving capital efficiency, but warn that high debt and oil price volatility still dominate the risk profile. [57]
Taken together, the independent commentary broadly agrees: the balance‑sheet trend is positive, but the margin for error remains thin.
Bull vs. Bear Case for OXY Going Into 2026
Bull case: Deleveraging, Buffett and High‑Quality Assets
Supporters of Occidental typically point to:
- High‑quality upstream assets
OXY is a major producer in the Permian Basin, Rockies, Gulf of Mexico and Oman, with 2024 net proved reserves near 4 billion barrels of oil equivalent and a balanced oil/gas mix. [58] - Accelerating debt reduction
Between asset sales, strong free cash flow and the OxyChem proceeds, OXY has already cut billions in debt and has a credible path toward sub‑$15 billion principal debt in the next few years. [59] - Improving cash‑flow profile
Lower capex in 2026 (relative to 2025) with flat‑to‑slightly‑higher production translates into more free cash flow per barrel, available for debt reduction, dividends and buybacks. [60] - Buffett “backstop”
With Berkshire owning close to 30% of the equity, plus preferreds and warrants, some investors view OXY as having an implicit vote of confidence from one of the world’s most respected capital allocators. [61] - Valuation vs. cash generation
While the P/E looks rich, OXY’s EV/EBITDA and free‑cash‑flow yield can appear attractive if oil stays in the $60–70 range and debt keeps falling. [62]
Under this view, OXY is a classic deleveraging play: as debt comes down and cash returns rise, the equity multiple could expand, especially if sentiment toward energy improves.
Bear case: Leverage, Oil Prices and Lost Diversification
Skeptics emphasize a different set of issues:
- Still‑heavy leverage and preferred obligations
Even after recent paydowns, OXY’s $20.8 billion of principal debt, $8.5 billion of 8% preferred stock and large warrant overhang leave it more levered than many peers, magnifying downside in a sustained oil slump. [63] - Commodity price risk
Reuters notes that 2025 has seen Brent crude fall roughly 12–13% amid OPEC+ supply increases and weaker demand, illustrating how quickly the macro backdrop can deteriorate. [64] A prolonged low‑price environment would pressure both earnings and debt‑reduction plans. - Loss of OxyChem diversification
By selling OxyChem, Occidental becomes even more dependent on upstream oil and gas, giving up a chemicals business that provided relatively stable earnings through the cycle. [65] - High headline valuation
A trailing P/E near 31x, significantly above the company’s historical average and many peer multiples, leaves less room for disappointment if oil prices or operational performance wobble. [66] - Execution and policy risk in low‑carbon ventures
OXY’s long‑term strategy includes direct air capture and carbon‑management projects, which are capital‑intensive and highly dependent on policy support and carbon‑credit economics—areas with considerable uncertainty. [67]
Under the bear case, OXY is a leveraged, commodity‑sensitive name where a lot must go right—oil prices, execution, and regulatory stability—for shareholders to fully realize the upside implied by bullish targets.
Bottom Line: A Buffett‑Backed Deleveraging Story, Not a Simple “Oil Bet”
As of December 6, 2025, Occidental Petroleum sits at a crossroads:
- The OxyChem sale and asset divestitures give it a genuine shot at a meaningfully stronger balance sheet within a few years. [68]
- Q3 2025 results confirmed that operations are running well, with production beating guidance and free cash flow robust even at lower oil prices. [69]
- 2026 guidance signals a shift toward flat volumes, lower capex and disciplined capital allocation, which should favor debt reduction and the dividend. [70]
- Yet leverage remains elevated, the valuation is not cheap on earnings, and the company is increasingly tied to the ups and downs of the global oil market. [71]
For investors, OXY looks less like a pure “bet on oil” and more like a complex capital‑structure and cash‑flow story:
- Those who believe in sustained mid‑cycle oil prices, continued debt reduction and disciplined spending may see the current price as an entry into a Buffett‑backed name with moderate yield and potential upside toward the Street’s ~$50–64 targets.
- Those more worried about macro downside, leverage and the loss of chemical diversification may prefer either integrated majors with stronger balance sheets or lower‑geared independents.
Either way, Occidental is likely to remain a headline stock in the energy sector through 2026 as the OxyChem sale closes, debt metrics shift, and Berkshire’s long‑running bet plays out in real time.
References
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