Occidental Petroleum OXY Stock Price Forecast - Falls to $44.23 as Berkshire Buys OxyChem for $9.7B

Occidental Petroleum (NYSE:OXY) Stock Under Pressure After $9.7B OxyChem Sale

Berkshire Hathaway’s $9.7 Billion Purchase Changes OXY’s Structure

Occidental Petroleum (NYSE:OXY) shocked the market after announcing it will sell its OxyChem division to Warren Buffett’s Berkshire Hathaway for $9.7 billion in cash, Berkshire’s largest deal since it acquired Alleghany for $11.6 billion in 2022. OxyChem, which generated close to $5 billion in revenue in the last twelve months, has long been a stabilizer against oil market swings. With this transaction, Buffett strengthens Berkshire’s industrial footprint while Occidental secures immediate liquidity. The company stated it will allocate $6.5 billion of the proceeds toward reducing principal debt, bringing total debt below $15 billion—a long-standing target since its CrownRock acquisition. CEO Vicki Hollub highlighted that with leverage lowered, OXY can restart share repurchases, positioning the company for renewed capital returns to shareholders.

OXY Stock Plunges Despite Debt Reduction Strategy

Shares of Occidental closed at $44.23 on October 2, down -7.31%, wiping nearly $3.5 billion off its market value in a single session. Despite overnight trading lifting the price modestly to $44.80 (+1.29%), investors remain skeptical about the loss of a reliable cash-generating business. OXY’s market cap now sits at $43.5 billion, down from $55.8 billion a year ago, reflecting both softer oil prices and concerns over its strategic shift. By contrast, peers such as ConocoPhillips (NYSE:COP) at $93.38 and Diamondback Energy (NASDAQ:FANG) at $143.19 remain supported by diversified operations and stronger valuations. Occidental trades at a P/E of 26.02 versus its forward estimate of 16.18, signaling that while the company has future earnings potential, its near-term growth profile is under strain.

Financial Position: Revenue Pressure and Cash Flow Dynamics

Occidental’s fundamentals show both resilience and pressure points. The company reported $27.15 billion in trailing twelve-month revenue, down from $36.6 billion in 2022, reflecting weaker oil prices. Net income stands at $1.73 billion, translating to a 9% profit margin, with return on equity of 7.11%. Debt remains heavy at $24.17 billion, a 66.8% debt-to-equity ratio, though the OxyChem sale should meaningfully reduce leverage and save around $350 million annually in interest costs. Free cash flow came in at $4.52 billion TTM, giving OXY room to cover its $0.96 annual dividend (2.17% yield). However, quarterly earnings remain volatile, with Q2 2025 EPS of $0.39 plunging -60.6% year-on-year. While operating cash flow of $12.15 billion remains strong, analysts warn that the loss of OxyChem’s stable contribution could hurt future free cash generation.

Analyst Forecasts and Price Targets Signal Divided Outlook

Wall Street analysts remain split. Consensus puts the average price target at $51.18, with a high of $65.00 and a low of $40.00, versus the current $44.23. EPS for 2025 is projected at $2.36, down from $3.46 in 2024, while 2026 is forecast to recover to $2.64. In the past 30 days, 15 analysts have cut estimates for Q3 earnings, compared to just 1 upward revision. Revenue is projected at $26.49 billion in 2025, slightly declining year-on-year, with only a modest recovery to $26.72 billion in 2026. Growth expectations are subdued: estimates imply a -31.7% EPS decline in 2025, followed by just +11.7% growth in 2026, well below the S&P 500’s projected growth rates.

Comparative Performance Against Broader Market

Over the last 12 months, OXY delivered a +15.5% return, but this lags the S&P 500’s +17.6%. Year-to-date, OXY is up +9%, again underperforming the index’s +14%. Looking longer term, Occidental’s five-year return of +373% dwarfs the S&P’s +100.5%, a testament to its leveraged recovery after the 2020 oil crash. Yet its one-year volatility underscores the risk: OXY has traded between $34.78 and $56.49, a wide range that highlights investor uncertainty. The stock is currently trading just below both its 50-day moving average ($45.56) and its 200-day average ($45.37), suggesting near-term technical weakness. Breaking below $43.80 could open downside to the $40 level, while upside resistance sits near $47.90.

Insider and Institutional Positioning in NYSE:OXY

Institutional investors hold just over 50.3% of outstanding shares, while insiders, including Berkshire Hathaway, control 27.2%. Short interest surged to 36.9 million shares as of September 15, 2025, or 5.83% of float, showing a growing bearish stance from hedge funds betting against the stock. Investors can monitor executive transactions through the OXY insider transactions page, which will be crucial in gauging management’s confidence after the OxyChem divestiture. Should insiders increase buying activity at current depressed levels, it may signal undervaluation and stabilize sentiment.

Strategic Impact: From Diversified Portfolio to Pure E&P Exposure

The divestiture leaves Occidental far more dependent on upstream oil and gas. Production averaged 1.33 million BOE/day in 2024, with proved reserves of nearly 4 billion BOE. While this positions OXY as a heavyweight in exploration and production, it eliminates the stable cash flows from chemicals that buffered earnings during oil downturns. Without OxyChem’s consistent EBITDA, Occidental’s results will now swing more directly with Brent and WTI crude prices. The trade-off is clear: lower debt and enhanced buyback potential, but a business model now more cyclical and exposed.

Investment Outlook for Occidental Petroleum (NYSE:OXY)

Occidental Petroleum is trading at $44.23, a valuation below consensus but weighed by uncertainty. Buffett’s involvement provides a cushion, yet the company’s increased reliance on crude prices leaves it vulnerable. Analysts remain divided between bullish targets of $65 and bearish estimates as low as $40. With debt relief improving balance sheet flexibility but the loss of diversification raising risk, the stock presents a conflicted setup. At current levels, OXY remains a Hold, suitable for investors willing to ride oil price cycles under the confidence of Berkshire Hathaway’s continued backing.