OXY Trading at a Premium at 4.99X: Time to Hold or Sell the Stock?

Core Viewpoint - Occidental Petroleum Corporation (OXY) is currently trading at a premium compared to the industry average, indicating a marginal overvaluation [1][4]. Financial Metrics - OXY's trailing 12-month EV/EBITDA is 4.99X, while the industry average is 4.76X [1]. - Hess Corporation (HES) is trading at an EV/EBITDA of 7.41X, also at a premium compared to its industry [5]. - OXY shares gained 10.3% last month, outperforming the industry's rally of 8.4% [5]. Competitive Advantage - Occidental operates as a low-cost operator with high-quality assets globally, providing a competitive edge over peers [2][14]. - The company has made significant capital investments, over $7 billion in 2024, and plans to invest between $7.2 billion and $7.4 billion in 2025, which is substantially higher than Hess Corporation's planned $4.5 billion investment [14]. Production and Strategic Initiatives - The acquisition of CrownRock assets has boosted OXY's production volumes and reduced well operating costs [10][15]. - For 2025, total production is anticipated to range between 1,390 and 1,440 thousand barrels of oil equivalent per day (Mboe/d), with the Permian region contributing approximately 760–786 Mboe/d [12]. - International production for 2025 is projected to fall between 226 and 236 Mboe/d [13]. Earnings Performance - OXY has surpassed earnings estimates in each of the last four reported quarters, with an average earnings surprise of 24.34% [16]. - The Zacks Consensus Estimate for OXY's 2025 and 2026 earnings per share has decreased by 30.06% and 29.06%, respectively, in the past 60 days [19]. Return on Equity - OXY's trailing 12-month return on equity (ROE) is 16.89%, slightly lower than the industry average of 16.6% [21].