Dahlman Rose reported on Tuesday that they have begun coverage of oil and gas producer, Occidental Petroleum Corporation(OXY).
The firm has initiated coverage of OXY with a “Buy” rating and a price target of $86. This price target suggests a 12% increase from the stock’s current price of $75.35.
An analyst from the firm commented, “OXY shares have underperformed the sector by roughly 20% over the past 12 months, reflecting disappointing operating/financial results versus high expectations, among other factors. We believe sentiments are currently very low – providing an opportune time for longterm investors to accumulate shares. For a large global company, OXY offers above-average oil/gas production growth (5-8% per year LT target), top-quartile ROCE (2011 ROCE 17.1%), a deep and quality asset portfolio (reserve life 11.9 years with significant resource upside in the US and the Middle East), and a management team focused on cash distribution (last ten year dividend growth CAGR was 15.8% per year).”
Occidental Petroleum shares were mostly flat during premarket trading Tuesday. The stock is down -20% YTD.
The Bottom Line
Shares of Occidental Petroleum (OXY) have a 2.87% dividend yield, based on last night’s closing stock price of $75.35. The stock has technical support in the $70-$72 price area. If the stock can firm up, we see overhead resistance around the $79-$81 price levels.
Occidental Petroleum Corporation(OXY) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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