Occidental Up As Goldman Upgrades, Citing Gap With Rivals    By Investing.com

By Dhirendra Tripathi

Investing – Occidental Petroleum (NYSE:OXY) shares rose Thursday after Goldman Sachs (NYSE:GS) upgraded, saying the valuation gap with its competitors was too wide.

Analyst Neil Mehta has upgraded the stock to buy from neutral, with a target of $31. This is 19% higher than the stock’s current price of $26.

Mehta believes the oil and gas company will continue to focus on reducing its debt but be that as it may, it doesn’t warrant underperformance.

Occidental had a long-term net debt of $35.46 billion at the end of March. Current liabilities came at $8.63 billion against current assets of $10.07 billion.

At the May 11 conference call for analysts after its first quarter earnings announcement, Occidental’s CFO Rob Peterson said “returning to investment-grade in a mid-cycle commodity price environment may include reducing debt to the mid-$20 billion range”.

According to the analyst, higher energy prices should help the exploration and marketing company pay down its debts.

Occidental bought Anadarko Petroleum (NYSE:APC) in 2019, and the stock has under-performed most peers since.