Occidental Petroleum (OXY) Added to BofA US 1 List; Price Target Raised to $31
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(Updated - February 8, 2021 8:43 AM EST)
BofA Securities added Occidental Petroleum (NYSE: OXY) to the US 1 List, while removing Jazz Pharmaceuticals PLC (NASDAQ: JAZZ). The firm also raised the price target on OXY to $31 from $27 and reiterated a Buy rating.
Analyst Doug Leggate cited the underlining oil recovery.
Leggate commented, "We continue to believe Occidental is past the worst following a commodity downturn that exposed the high level of debt used to finance the acquisition of Anadarko in 2019. Looking forward, we believe the investment case has evolved from a highly volatile battleground stock to one of the most levered recovery plays, with upside potential of 30% under the BofA base case that has $55 Brent from 2022; moreover OXY stands as one of the biggest beneficiaries of what we believe is the early stages of a multi-year commodity recovery with one of the highest free cash yields of the US oils and one of the lowest cost portfolios in terms of sustaining capital in the industry, with options from expected asset monetization to accelerate the transfer of value from debt to equity."
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