Why Occidental Petroleum is on investors’ radar today

Occidental Petroleum (OXY) has drawn attention after its shares moved to US$60.31, capping a mixed period that includes a 0.7% decline over the past day and a 50.4% gain in the past 3 months.

The recent pullback sits against a strong run, with a 16.3% 30 day share price return feeding into a 50.4% 90 day move and a 138.1% 5 year total shareholder return. This points to momentum that markets are still actively reassessing for risk and reward.

If you are looking beyond oil and gas and want to see what else is moving, this could be a good moment to scan 89 nuclear energy infrastructure stocks

With Occidental trading around US$60.31 and reported to be at a 48.3% discount to one intrinsic value estimate, investors are asking a key question: is this genuine mispricing, or is the market already factoring in expectations for future growth?

Most Popular Narrative: 11.7% Undervalued

Occidental Petroleum's last close at $60.31 sits below a widely followed fair value narrative of $68.29, which frames the current share price as discounted.

OXY is the first oil giant to not only extract oil but also turn carbon removal from the atmosphere into a commercial model. STRATOS, the world's largest Direct Air Capture (DAC) facility, is scheduled to come online in mid 2025.

The fair value hinges on how far this carbon removal model can scale, how earnings evolve around it, and what kind of long term margins the narrative expects.

Result: Fair Value of $68.29 (UNDERVALUED)

However, the story could shift quickly if DAC costs stay high or if OXY's premium P/E multiple declines in response to any disappointment around CrownRock execution.

Another way to look at OXY’s valuation

The user narrative leans on a fair value of $68.29, but the earnings multiple tells a very different story. OXY trades on a 44.3x P/E, compared with a 26.8x fair ratio estimate, a 26x peer average and a 15.9x sector average. This points to a rich price that could compress if sentiment cools.

For a sense of how this gap might matter if the market drifts back toward the fair ratio, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment divided between opportunity and concern, this is a good moment to review the data yourself and decide where you stand, starting with 2 key rewards and 3 important warning signs

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.