An Occidental Petroleum strategy shift is drawing a rare double upgrade from Evercore ISI, which says lower leverage and better capital efficiency can finally reconnect the stock to oil fundamentals.
Evercore raised Occidental to outperform from underperform and lifted its price target 12% to $65 from $58, implying about 26% upside from Tuesday’s close. Analyst Stephen Richardson argued a de-levered balance sheet and a structural step-up in capital efficiency reshape free cash flow and the path back to shareholder returns.
What the Occidental Petroleum strategy shift changes
Shares are down almost 14% over three months as oil cooled and the Iran conflict eased. WTI futures fell about 21% in the same span. Under CEO Richard Jackson, Occidental has cut well costs and adopted a shallower base decline to reduce maintenance capital. Evercore says that flattens and lifts free cash flow and supports a buyback restart in 2028.
However, Wall Street remains cautious. LSEG data show 15 of 25 analysts rate Occidental no better than a hold, with nine buys and one underperform. Berkshire Hathaway owns 26.6% of common stock plus about $8.3 billion in preferred stock carrying an 8% coupon. Evercore called that preferred the biggest structural drag on common-equity leverage to oil, with the earliest redemption in August 2029.
What investors should watch
For Business desks, the Axo read is that the Occidental Petroleum strategy shift is less about a one-day oil bounce and more about whether efficiency gains can outrun preferred-stock overhang. As CNBC reported, Evercore is betting the free-cash-flow story finally gets a cleaner hearing.