Roth Capital upgraded Occidental Petroleum to Buy from Neutral and set a $70 price target, arguing that the producer offers strong exposure to higher oil prices alongside an improving balance sheet and lower production declines than peers.
Analyst Leo Mariani highlighted Occidental’s 49% oil production mix, including about 18% of oil volumes priced at a premium to Brent. He also noted that the company is expected to remain unhedged on oil from 2027 onward, leaving its results more directly exposed to crude-price movements.
Debt reduction is central to the case.
Occidental said its near-term cash-flow priority is reaching $10 billion of principal debt. After that, management plans to weigh further debt reduction, building cash ahead of preferred-equity redemption in August 2029 and opportunistic share repurchases, depending on market conditions.
The company has also outlined a plan to increase free cash flow by about $4 billion between 2025 and 2030, assuming $65-a-barrel WTI and no production growth. The plan calls for $1. 4 billion in sustaining-capital reductions and $2. 6 billion in cost savings, including lower interest expense, preferred dividends and corporate overhead.
Management said it expects substantial cash-flow growth by 2030 while maintaining a focus on cost efficiency, capital discipline and lower decline rates.