Occidental Petroleum Drops to 52-Week Low: Buy, Sell, or Hold?

Core Viewpoint - Occidental Petroleum's stock has reached a 52-week low, raising investor concerns, but the long-term outlook remains positive due to solid cash flow and strategic repositioning efforts [1][2]. Financial Performance - The company has a P/E ratio of 18.62 and a dividend yield of 2.11%, with a price target set at $61.50 [1]. - By the end of 2024, Occidental aims to achieve a$4.5 billion debt reduction target while increasing cash balances and total assets, with shareholder equity improving by over 13% in 2024 and expected growth in 2025 [8]. Strategic Initiatives - Occidental is undergoing a significant repositioning towards sustainability, including a shift to greener energy businesses and enhancing capital returns [2]. - The STRATOS direct air capture (DAC) plant, the largest of its kind, is expected to begin operations by Q3 2025, contributing to revenue growth in 2026 as it ramps up capacity [4]. - The Battleground chemical plant expansion is set to enhance the higher-margin mid-stream chemical business, with operations expected to commence in mid-2026 [5]. Market Sentiment - Institutional interest in Occidental is solid and growing, with notable purchases by Berkshire Hathaway, which owns approximately 30% of the stock and has been approved to acquire up to 50% [2][9]. - The stock is currently rated as a "Hold" by analysts, with a projected earnings growth of 7.54% [7][8]. Investment Outlook - The stock price has retreated to a critical support level between $43 and$48, which aligns with Warren Buffett's initial entry points, indicating a potential market reversal driven by improving financial conditions [10]. - Despite the current market pressures, the expectation is for the stock to consolidate around its current levels rather than decline further [11].