Evercore said Occidental is well positioned to benefit from higher oil prices after reducing debt and improving its free cash flow profile.
- The brokerage upgraded the stock to ‘Outperform’ from ‘In Line’ and raised the price target to $65 from $58.
- Evercore expects Occidental’s free cash flow per share to grow about 8% annually through 2030 at a $75 West Texas Intermediate price.
- The firm also expects the company to resume share buybacks starting in the second half of 2028.
Occidental Petroleum (OXY) was in the spotlight on Wednesday, as higher crude prices and a bullish analyst call boosted investor optimism surrounding the stock.
OXY shares were up more than 3% in early trading.
Strong Free Cash Flow To Boost OXY Stock Price
On Wednesday, Evercore ISI upgraded the stock to ‘Outperform’ from ‘In Line’ and raised the price target to $65 from $58, citing a stronger balance sheet and improved capital efficiency. The latest target represents around 25% upside potential from the stock’s closing price on Tuesday.
However, the target is lower than the highs reached by the stock in 2026. In late March, the stock surpassed the $67 for the first time since May 2024 but failed to hold the level.
Analyst Stephen Richardson believes Occidental is well positioned to benefit from higher oil prices after reducing debt and improving its free cash flow profile, according to The Fly.
The analyst said the upgrade is not based on faster growth. Instead, the firm expects Occidental’s free cash flow per share to grow about 8% annually through 2030 at a flat $75 West Texas Intermediate (WTI) price, which is slower than several peers, including Diamondback (FANG), ConocoPhillips (COP) and Chevron (CVX).
However, he believes the stock is undervalued, with investors not fully recognizing the company’s lasting efficiency improvements and stronger balance sheet.
Evercore also expects the company to resume share buybacks starting in the second half of 2028, driven by increased free cash flow from lower well costs and reduced maintenance spending.
Oil Prices Rise After Iran US-Ceasefire Ends
Oil prices surged on Wednesday as geopolitical tensions in the Middle East intensified. President Donald Trump said the ceasefire with Iran was over after Iran attacked three commercial ships in the Strait of Hormuz, prompting the U.S. to revoke a sanctions waiver for limited Iranian oil sales. The U.S. also said it carried out a series of powerful strikes against Iran late Tuesday.
Brent oil futures for September 2026 deliveries climbed 5% to $77.8 per barrel. The West Texas Intermediate Crude futures for August 2026 deliveries rose 4.7% to $73.7 per barrel.
Retail’s Take On OXY
Retail sentiment surrounding OXY on Stocktwits turned ‘bullish’ from ‘neutral’ a day earlier, amid ‘high’ message volumes.
Since the U.S.- Israeli strikes on Iran began on Feb. 28, 2026, OXY shares have shed more than 6%, largely in line with peers CVX and COP.
OXY shares have gained 24% so far this year.
Also read: El-Erian Says Oil Could Climb Above $90 If US-Iran Conflict Escalates As Trump Declares Ceasefire ‘Over’
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