Occidental Petroleum Corporation (NYSE: OXY) is among the most levered stocks to an oil recovery, according to BofA Securities.
The OccidentalÂ Analyst: Doug Leggate maintained a Buy rating for Occidental Petroleum, with aÂ price target of $29.
The OccidentalÂ Thesis: The companyâ€™s stock came under significant pressure and has â€œpaid the priceâ€ for its capital structure being â€œheavily weighted towards debt,â€ Leggate said in the note.
He added, however, that Occidental Petroleum will benefit due to its oil leverage now that there is upside to oil prices.
The analyst noted the company had extended its debt maturities through 2023, enabling a transition in its investment case â€œfrom anxiety over its balance sheet to a focus on world class operations with the lowest capital intensity of the US oils and one of the highest free cash margins in the industry.â€
â€œIn recent months strong operating performance has been overshadowed by concerns over underlying portfolio declines and managements suggestion that its corporate break-even was still in the high $30s WTI. On closer examination we believe it is being conservative on both measures,â€ Leggate wrote in a note.
OXY Price Action: Shares of Occidental Petroleum had risen by 7% to $18.09 at the time of publication Wednesday.
Latest Ratings for OXY
|Dec 2020||Wells Fargo||Upgrades||Underweight||Equal-Weight|
|Dec 2020||Morgan Stanley||Maintains||Equal-Weight|
|Dec 2020||MKM Partners||Downgrades||Buy||Neutral|
Â© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.