Group 1 - Occidental Petroleum is negotiating the sale of its OxyChem division in a deal that could exceed $10 billion [2] - If completed, this transaction would represent Occidental's largest divestiture to date [2]

Core Viewpoint - Occidental Petroleum is in negotiations to sell its OxyChem division, with a potential valuation of at least $10 billion [1] Company Summary - The sale of the OxyChem division indicates Occidental Petroleum's strategic move to optimize its portfolio and focus on core operations [1] - The transaction could significantly impact Occidental's financial standing, providing capital for further investments or debt reduction [1] Industry Summary - The chemical industry is experiencing consolidation, and this potential sale aligns with broader trends of companies divesting non-core assets to enhance operational efficiency [1] - Valuations in the chemical sector remain robust, as evidenced by the anticipated $10 billion valuation for OxyChem, reflecting strong market demand [1]

Occidental Petroleum Corp. is in talks to sell its OxyChem petrochemical unit in a deal worth at least $10 billion, the Financial Times reported Sunday https://t.co/obalJu4bxB ...

Industry Overview - The Zacks Oil & Gas US Integrated industry includes companies involved in upstream and midstream energy businesses, focusing on oil and natural gas exploration and production [3] - Upstream operations are positively correlated to oil and gas prices, while midstream assets generate stable fee-based revenues [3] Current Market Conditions - The crude pricing environment is expected to weaken this year, with the U.S. Energy Information Administration (EIA) projecting the average price of West Texas Intermediate crude at $64.16 per barrel, down from $76.60 per barrel last year [4] - Increasing worldwide oil inventory is anticipated to negatively impact commodity prices, which is unfavorable for exploration and production activities [4] Production and Investment Trends - Lower oil prices are likely to hinder production growth, as energy companies are prioritizing returning capital to shareholders over increasing production [5] - The shift towards renewable energy sources is expected to gradually reduce demand for fossil fuels, posing challenges for integrated players in both upstream and downstream operations [6] Industry Performance - The Zacks Oil & Gas US Integrated industry currently holds a Zacks Industry Rank of 173, placing it in the bottom 30% of over 250 Zacks industries, indicating a bearish outlook [7][8] - Over the past year, the industry has underperformed compared to the broader Zacks Oil - Energy sector and the S&P 500, declining by 5% while the sector gained 9% and the S&P 500 surged by 19.9% [9] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 4.64X, lower than the S&P 500's 18.47X and the sector's 5.15X [13] - Historical trading ranges for the industry have been between 3.05X and 13.64X over the past five years, with a median of 4.64X [13] Key Companies to Watch - ConocoPhillips (COP) is expected to perform well due to its operations in low breakeven cost resources, particularly in the Permian basin [17] - Occidental (OXY) has generated strong cash flows in the first half of the year despite a weaker pricing environment, attributed to efficient operations and cost control [20] - National Fuel Gas (NFG) is well-positioned to navigate the uncertain environment due to its integrated business model and presence in the natural gas-rich Appalachian basin [23]

Group 1 - Occidental Petroleum (NYSE: OXY) is a significant player in the US energy sector and is also a holding of Berkshire Hathaway, which enhances its market position [1] - The article is authored by two consultants specializing in corporate finance and M&A analysis, focusing on US-listed companies across various sectors [1] - The research combines fundamental and technical analysis, emphasizing medium to long-term investment strategies [1]

Core Viewpoint - Jim Cramer advises against investing in Occidental Petroleum Corporation (NYSE:OXY), labeling it as a subpar oil company with limited growth potential, despite its ownership by Berkshire Hathaway [1]. Company Overview - Occidental Petroleum Corporation engages in the exploration and production of oil, natural gas, and natural gas liquids (NGLs), in addition to operating chemical manufacturing and midstream marketing businesses [1]. Investment Sentiment - Cramer expresses skepticism about the future performance of OXY, indicating that he does not foresee the company receiving any significant bids or an increase in oil prices [1]. - The article suggests that while OXY has potential, there are AI stocks that present greater upside potential and lower downside risk, indicating a shift in investment focus [1].

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]