NEW YORK (TheStreet) -- Shares of Occidental Petroleum Corp. (OXY) are declining, lower by 4.15% to $76.46 on heavy trading volume on Monday, after the company had its price target lowered by analysts at Bank of America/Merrill Lynch and Jefferies this morning following the spin-off of its subsidiary, California Resources Corp. (CRC) .
BofA/Merrill Lynch analysts cut its price target on the shares to $105 from $130, but maintained its "buy" rating.
Analysts at investment firm Jefferies also lowered its price target on shares to $104 from $112, but kept its "buy" rating, and said its updated price target reflects the company's reduced equity position following its spin-off.
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About 4.5 million shares of Occidental Petroleum traded hands as of 11:38 a.m. on Monday, compared to its average trading volume of about 2.28 million shares per day.
Separately, TheStreet Ratings team rates OCCIDENTAL PETROLEUM CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate OCCIDENTAL PETROLEUM CORP (OXY) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for OCCIDENTAL PETROLEUM CORP is rather high; currently it is at 54.80%. Regardless of OXY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OXY's net profit margin of 20.14% significantly outperformed against the industry.
- OXY's debt-to-equity ratio is very low at 0.19 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 0.83 is somewhat weak and could be cause for future problems.
- OXY, with its decline in revenue, slightly underperformed the industry average of 6.4%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OCCIDENTAL PETROLEUM CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- OCCIDENTAL PETROLEUM CORP's earnings per share declined by 21.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OCCIDENTAL PETROLEUM CORP increased its bottom line by earning $7.35 versus $5.71 in the prior year. For the next year, the market is expecting a contraction of 13.1% in earnings ($6.39 versus $7.35).
- You can view the full analysis from the report here: OXY Ratings Report