Occidental Petroleum (OXY) PT Raised to $33 at BofA Securities As Oil Curve Recovers

BofA Securities analyst Doug Leggate raised the price target on Occidental Petroleum (NYSE: OXY) to $33.00 (from $32.00) while maintaining a Buy rating, citing the recovery of the front end of the oil curve, oil price leverage, underpriced disposal opportunities to reduce leverage, and management changes that align the interests of the company and shareholders.

The analyst stated "Another spike in the VIX and continued commodity volatility is the most palpable evidence that the market may not quite be ready to move up the risk curve for energy. While elevated debt exacerbates equity volatility, we believe distinguishing between high levels of debt & liquidity risk is key to identify those stocks with potential to outperform in the next stage of the energy sector recovery. We believe OXY is past the worst with line of sight on free cash flow to cover debt maturities that is the single biggest source of debate for the stock. With a refreshed board aligned with investors and deep asset base with no sacred cows to accelerate debt reduction we view elevated share price volatility as an acceptable tradeoff to significant upside potential under our base case. In this note we examine our recent upgrade in greater detail and lift our PO to $33."

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