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Occidental Petroleum (OXY) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Occidental Petroleum (OXY) closed the most recent trading day at $42.52, moving -1.78% from the previous trading session. This change lagged the S&P 500's 0.11% gain on the day. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, added 0.2%.

Prior to today's trading, shares of the oil and gas exploration and production company had gained 8.52% over the past month. This has outpaced the Oils-Energy sector's loss of 2.03% and the S&P 500's gain of 3.25% in that time.

Investors will be hoping for strength from OXY as it approaches its next earnings release, which is expected to be February 27, 2020. The company is expected to report EPS of $0.15, down 87.7% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.39 billion, up 33.11% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for OXY. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 23.97% higher. OXY is currently a Zacks Rank #2 (Buy).

Digging into valuation, OXY currently has a Forward P/E ratio of 26.81. This represents a premium compared to its industry's average Forward P/E of 19.39.

Also, we should mention that OXY has a PEG ratio of 5.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Oil and Gas - Integrated - United States stocks are, on average, holding a PEG ratio of 2.78 based on yesterday's closing prices.

The Oil and Gas - Integrated - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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