"Oxy is undergoing what is in our view the most significant restructuring in the large-cap oil and gas sector that includes: divesting non-core assets that could generate proceeds of near $7 billion; spinning out its California operations into a newly listed company; and utilizing proceeds from these transactions to reduce the equity base by at least 14%, " the firm said in a note.
Separately, TheStreet Ratings team rates OCCIDENTAL PETROLEUM CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OCCIDENTAL PETROLEUM CORP (OXY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- OXY's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for OCCIDENTAL PETROLEUM CORP is rather high; currently it is at 57.65%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.83% significantly outperformed against the industry average.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 2.6% when compared to the same quarter one year prior, going from $1,355.00 million to $1,390.00 million.
- OXY's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: OXY Ratings Report