Dahlman Rose Initiates Coverage of Occidental Petroleum (OXY)
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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