Industry Overview - The Zacks Oil-Energy sector is crucial for the global economy, providing essential energy for various industries including transportation and manufacturing [1] - Despite the rise of renewable energy, oil and gas remain vital due to their energy density and established infrastructure [1] Company Profiles - Devon Energy Corporation (DVN) is a leading independent oil and natural gas exploration and production company in the U.S., focusing on a diversified multi-basin portfolio, particularly in the Permian Basin [2] - Occidental Petroleum Corporation (OXY) operates globally with integrated upstream and midstream operations, emphasizing its resources in the Permian Basin [3] Earnings Growth Prospects - The Zacks Consensus Estimate for DVN's 2025 earnings indicates a decline of 15.98%, with a projected growth of 4.05% in 2026 [5] - OXY's 2025 earnings are expected to decline by 34.68%, with a slight growth of 1.68% anticipated in 2026 [8] Financial Metrics - Devon Energy has a return on equity (ROE) of 18.59%, higher than OXY's 13.78% and the sector's average of 15.07% [13] - Devon's debt to capital ratio is 35.44%, compared to Occidental's 39.22%, indicating a more conservative debt management strategy [12] Valuation - Devon Energy is currently trading at a trailing 12-month EV/EBITDA of 3.82X, which is lower than Occidental's 5.55X, suggesting a cheaper valuation for Devon [14] Dividend Yield - Devon Energy offers a dividend yield of 2.71%, having raised its dividend nine times in the past five years, while Occidental's yield is 2.03% with four increases in the same period [16] Hedging Strategies - Devon Energy has hedged its 2025 production volumes to mitigate price fluctuations, whereas Occidental remains exposed to market prices without active commodity hedges [17] Capital Expenditure Plans - Devon plans to invest between $3.6 billion and $3.8 billion in 2025, while Occidental aims for investments between $7.1 billion and $7.3 billion [19] Price Performance - Over the past three months, Devon Energy's shares have increased by 2.1%, while Occidental Petroleum's shares have risen by 3.8% [20] Conclusion - Both Devon Energy and Occidental Petroleum hold a Zacks Rank of 3 (Hold), with Devon having a strategic advantage due to its focus on U.S.-centric assets, which helps mitigate geopolitical risks [23][24]

Company Insights - Western Union announced the acquisition of Intermex for approximately $500 million, aimed at strengthening its position in the high-growth Latin American markets [1] - Johnson Controls raised its dividend from 37 cents to 40 cents per share on September 10 [2] - MNTN reported a second-quarter loss of 65 cents per share, an improvement from a loss of 69 cents per share a year ago, with quarterly sales of $68.460 million, exceeding analyst estimates of $64.483 million [2] - Nordic American Tankers posted weaker-than-expected quarterly sales on August 28, leading to a negative outlook from analysts [3] - Occidental Petroleum maintained a Neutral rating from UBS, with a price target increase from $45 to $46 [3][4] - Kenvue received a Neutral rating from Citigroup, with a price target reduction from $22 to $20 [4] Stock Performance - Western Union shares fell 1.7% to settle at $8.20 [7] - Johnson Controls shares gained 1% to close at $108.48 [7] - MNTN shares rose 0.1% to settle at $20.08 [7] - Nordic American shares fell 0.3% to $3.30 [7] - Occidental Petroleum shares rose 0.4% to close at $47.36 [7] - Kenvue shares fell 1.3% to settle at $18.10 [7]

Group 1: Western Union - Western Union announced the acquisition of Intermex for approximately $500 million to strengthen its position in high-growth Latin American markets [1] - Western Union shares fell 1.7% to settle at $8.20 [7] Group 2: Johnson Controls - Johnson Controls raised its dividend from 37 cents to 40 cents per share [2] - Johnson Controls shares gained 1% to close at $108.48 [7] Group 3: MNTN, Inc. - MNTN reported a second-quarter loss of 65 cents per share, an improvement from a loss of 69 cents per share a year ago, with quarterly sales of $68.460 million, exceeding analyst estimates of $64.483 million [2] - MNTN shares rose 0.1% to settle at $20.08 [7] Group 4: Nordic American Tankers - Nordic American Tankers posted weaker-than-expected quarterly sales, leading to a negative outlook [3] - Nordic American shares fell 0.3% to $3.30 [7] Group 5: Occidental Petroleum - UBS analyst maintained Occidental Petroleum with a Neutral rating and raised the price target from $45 to $46 [3] - Occidental Petroleum shares rose 0.4% to close at $47.36 [7] Group 6: Kenvue Inc. - Kenvue was maintained with a Neutral rating by Citigroup, with the price target lowered from $22 to $20 [4] - Kenvue shares fell 1.3% to settle at $18.10 [7]

Core Insights - Occidental Petroleum's carbon capture business leader indicates that direct air capture (DAC) projects need to move beyond traditional financing models to scale effectively, as current DAC methods lack "bankability" [1][4] - The company is heavily investing in DAC technology, with its subsidiary 1PointFive set to complete a facility in Texas by the end of the year, aiming to capture 500,000 tons of CO₂ annually, making it the largest DAC facility globally [2][3] Group 1: Direct Air Capture Technology - Direct air capture (DAC) is a technology that extracts CO₂ directly from the atmosphere using chemical or physical absorbents, differing from capture methods at emission sources [3] - Occidental Petroleum's 1PointFive is constructing the STRATOS facility in Texas, which has received EPA injection permits and aims to capture 500,000 tons of CO₂ per year [3] - The company's DAC technology primarily stems from its acquisition of Carbon Engineering for $1.1 billion in 2023, utilizing a liquid solvent (KOH) absorption method [3] Group 2: Market Dynamics and Challenges - The current market for carbon capture relies heavily on voluntary carbon removal contracts and government incentives, with banks still waiting for "bankable cash flows" to develop [4] - Cottone suggests that a more realistic model for expanding the carbon capture and storage market involves having a single entity manage the entire carbon asset chain, from capture to storage [2] - Transitioning from voluntary carbon markets to a regulated global market could also facilitate growth in the sector [2]

Company Performance - Occidental Petroleum (OXY) closed at $47.19, reflecting a -1.19% change from the previous day, underperforming the S&P 500's daily loss of 0.1% [1] - Over the past month, shares of Occidental Petroleum have appreciated by 8.64%, outperforming the Oils-Energy sector's gain of 3.89% and the S&P 500's gain of 2.57% [1] Financial Projections - The upcoming earnings per share (EPS) for Occidental Petroleum is projected to be $0.49, indicating a 51% decrease from the same quarter last year [2] - Quarterly revenue is expected to be $6.64 billion, down 7.18% from the year-ago period [2] - For the full year, earnings are projected at $2.29 per share and revenue at $26.64 billion, representing changes of -33.82% and -0.88% respectively from the prior year [3] Analyst Estimates - Recent adjustments to analyst estimates for Occidental Petroleum reflect shifting short-term business dynamics, with upward revisions indicating analysts' positive outlook on the company's operations [4] - The Zacks Rank system, which considers these estimated changes, has a proven track record of outperformance, with 1 stocks returning an average of +25% annually since 1988 [5][6] - Currently, Occidental Petroleum holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate having moved 0.04% higher over the past month [6] Valuation Metrics - Occidental Petroleum is trading with a Forward P/E ratio of 20.86, which is a premium compared to the industry average Forward P/E of 16.07 [7] - The Oil and Gas - Integrated - United States industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 190, placing it in the bottom 24% of all 250+ industries [7][8]

Group 1 - Occidental Petroleum shares increased by 5% as oil prices rose due to developments in the Russia-Ukraine war affecting Russian oil supply [1] - Oil prices rose by 2% amid concerns over Russian oil supply, with Ukraine increasing drone attacks on Russian oil refineries, leading to a reduction in Russian oil refining below five million barrels per day, the lowest since April 2022 [2] - Prior to the recent rise, oil prices had fallen 9% this year to the $60 range, significantly lower than the $139 peak in 2022, but increased Ukrainian aggression against Russian oil assets could change the pricing dynamic [3] Group 2 - The Federal Reserve is expected to cut the federal funds rate, which could stimulate economic activity and increase oil demand [4] - Warren Buffett has allocated over 11% of his stock portfolio to Chevron and Occidental, viewing them as hedges against geopolitical risks due to their large inventory bases in the U.S. and friendly countries [6][7] - The increased aggressiveness of Ukraine in targeting Russian oil and refining assets has contributed to rising oil prices, benefiting Occidental and other U.S.-based oil companies [8]

Core Viewpoint - Occidental Petroleum Corporation is facing a 15% decline in shares due to softer WTI prices and investor concerns, yet it is building a strong bull case for future growth [1] Company Analysis - The company has a proven track record in scaling businesses and smart capital allocation, with insider ownership contributing to its stability [1] - Consistent revenue growth and credible guidance are highlighted as key strengths [1] Market Positioning - Occidental possesses a strong technology moat and first-mover advantage, which are critical for maintaining competitive positioning [1] - The company benefits from network effects that drive exponential growth and market penetration in high-growth industries [1] Financial Health - Sustainable revenue growth is supported by efficient cash flow and a strong balance sheet, ensuring long-term survival [1] - The company avoids excessive dilution and financial weakness, which is crucial for maintaining investor confidence [1] Valuation and Risk/Reward - Valuation is assessed through revenue multiples compared to peers and DCF modeling, ensuring a favorable risk/reward profile [1] - Institutional backing and market sentiment analysis are utilized to gauge potential upside while ensuring downside protection [1] Investment Strategy - The investment strategy includes core positions (50-70%) in high-confidence, stable plays, growth bets (20-40%) in high-risk opportunities, and speculative positions (5-10%) in potential disruptors [1]

Core Viewpoint - Occidental Petroleum Corporation is facing a 15% decline in shares due to softer WTI prices and investor concerns, yet it is building a strong bull case for future growth [1] Company Analysis - The company has a proven track record in scaling businesses and smart capital allocation, with insider ownership contributing to its stability [1] - Consistent revenue growth and credible guidance are highlighted as key strengths [1] Market Positioning - Occidental possesses a strong technology moat and first-mover advantage, which are critical for maintaining competitive positioning [1] - The company benefits from network effects that drive exponential growth and market penetration in high-growth industries [1] Financial Health - Sustainable revenue growth is supported by efficient cash flow and a strong balance sheet, ensuring long-term survival [1] - The company avoids excessive dilution and financial weakness, which is crucial for maintaining investor confidence [1] Valuation and Risk/Reward - Valuation is assessed through revenue multiples compared to peers and DCF modeling, ensuring a favorable risk/reward profile [1] - Institutional backing and market sentiment analysis are utilized to gauge potential upside while ensuring downside protection [1] Investment Strategy - The investment strategy includes core positions (50-70%) in high-confidence, stable plays, growth bets (20-40%) in high-risk opportunities, and speculative positions (5-10%) in potential disruptors [1]

Core Viewpoint - The oil sector experienced a rise on Tuesday, with several major companies showing significant stock price increases [1] Company Performance - Houston Energy (HUSA.US) rose over 1.8% [1] - ExxonMobil (XOM.US) increased by more than 1.7% [1] - Total (TTE.US) saw a slight increase of 0.17% [1] - Occidental Petroleum (OXY.US) surged over 3.6% [1] - ConocoPhillips (COP.US) climbed more than 2.3% [1] - Schlumberger (SLB.US) experienced a modest rise of 0.37% [1] - Marathon Oil (MRO.US) increased by over 2.4% [1]

I rate Occidental Petroleum (NYSE: OXY ) with a Hold rating. I think it is prudent to wait due to the bearish outlook of the energy sector and the high debt level of theDaniel Mellado is an economist from Carabobo University with a Master's Degree in Statistics from Simon Bolivar University, both obtained in Venezuela.Daniel worked analyzing the agricultural commodity market and the financial investment portfolio for an agribusiness group. Then, he managed two teams, one in trading and the other in data ana ...