Occidental Petroleum (OXY) Stock Falls as Oil Prices Hit Five-Year Low

NEW YORK (TheStreet) -- Shares of Occidental Petroleum  (OXY) fell 4.53% to $77.10 in late morning trading Monday as oil prices hit a five-year low.

Brent crude fell to $66.77, its lowest price since October 2009, amid concerns of continued oversupply. Brent then fell further to $66.70 at 11:17 a.m., according to CNBC.

Oil prices fell late last week after European Central Bank president Mario Draghi announced the bank would leave its rates unchanged, according to Business Insider. During the press conference, Draghi called the falling price of oil "unambiguously positive," which may have put pressure on oil prices.

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OPEC recently announced that it would maintain its oil production target of 30 million barrels a day, which helped bring down oil prices.

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 multiple strengths, 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 6.3%. 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. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OCCIDENTAL PETROLEUM CORP's return on equity is below that of both the industry average and 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 16.5% in earnings ($6.14 versus $7.35).
  • You can view the full analysis from the report here: OXY Ratings Report

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