Among the 26 analysts tracking Occidental Petroleum (OXY), 62% recommended a “buy,” while 38% recommended a “hold.” None of the analysts recommended a “sell.” On April 22, Mizuho changed its rating on Occidental Petroleum from “buy” to “neutral.” Also, Mizuho reduced its target price by $13 to $70. On April 24, Occidental Petroleum closed at $62.
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Acquired Anadarko Petroleum
Occidental Petroleum made a proposal to acquire Anadarko Petroleum (APC) at $76 per share. Anadarko Petroleum’s shareholders will receive $38 cash and 0.6 of Occidental Petroleum shares for each Anadarko Petroleum share held. The acquisition will help Occidental Petroleum to retain the number one position among Permian Basin oil and gas producers. Later this year, a few more pipeline projects will reduce the oil glut from this region and narrow the discount of WTI Midland to other grades of oil.
On April 12, Chevron (CVX) announced that it entered into a definitive agreement with Anadarko Petroleum to acquire all of Anadarko Petroleum’s outstanding shares in a stock and cash transaction valued at $33 billion or $65 per share.
Mean target price
Analysts’ mean target price of $78 for Occidental Petroleum implies an ~25.8% upside based on its last closing price. In comparison, the target prices for EOG Resources (EOG) and Concho Resources (CXO) suggest 15.8% and 28% increases, respectively.