TLDR
- Evercore ISI upgraded OXY from Underperform to Outperform, raising its price target from $58 to $65.
- Brent crude surged 6% to $78.50 a barrel after U.S. military strikes on Iran.
- President Trump declared the U.S.-Iran peace agreement “over” ahead of a NATO summit.
- OXY climbed roughly 3.8% in pre-market trading while broader markets fell.
- Evercore forecasts ~8% annual free cash flow per share growth through 2030.
Occidental Petroleum (OXY) had a strong Wednesday morning, rising nearly 3.8% in pre-market trading. Two things drove it: a double upgrade from Evercore ISI and a sharp spike in crude oil prices.
Occidental Petroleum Corporation, OXY
Evercore flipped its rating on OXY from Underperform all the way to Outperform — a two-notch move. It also raised its price target from $58 to $65. The firm pointed to lower leverage and better capital efficiency as the key reasons behind the change in view.
The stock had already been down roughly 15% over the prior month, so valuations were looking more attractive heading into the rebound. Wells Fargo also reaffirmed its Buy rating on OXY earlier this month.
At $52.88 before the open, OXY was trading around 1.6% above its 20-day moving average, though it still sat below both its 50-day and 100-day averages. The RSI was sitting at 45.33.
Key resistance is at $61. Key support is near $52.50, close to the 20-day SMA.
Crude Oil Jumps on U.S.-Iran Tensions
Brent crude surged 6% to $78.50 a barrel on Wednesday, according to Trading Economics. The move came after U.S. Central Command announced it had launched strikes against Iran, citing attacks on commercial shipping in international waters.
President Trump, speaking in Ankara ahead of a NATO summit, said the memorandum of understanding with Iran was “over.” That declaration effectively ended the interim ceasefire agreement between the two countries.
University of Michigan economist Justin Wolfers summed it up bluntly on X: “Trouble in Iran = Turmoil in global energy markets = Expect higher gas prices to follow.”
OXY tends to react more sharply to oil price moves than many of its peers, given its high sensitivity to commodity prices. That made Wednesday’s crude rally a direct tailwind for the stock.
Evercore’s Long-Term Case for OXY
Evercore’s upgrade wasn’t just about the near-term oil move. The firm laid out a longer-term thesis, forecasting free cash flow per share growth of around 8% annually through 2030. That forecast assumes WTI crude stays at $75 a barrel and production stays broadly flat.
The 8% growth rate does trail the roughly 20% compound annual growth Evercore projects for peers like Chevron (CVX), ConocoPhillips (COP), EOG Resources (EOG), and Diamondback Energy (FANG). But Evercore argues OXY’s lower well costs and slower base production decline reduce its maintenance capital needs, which supports stronger cash generation over time.
The firm also expects OXY to restart share repurchases in the second half of 2028.
Meanwhile, the broader market was moving in the opposite direction. The S&P 500 slipped 0.5%, the Dow eased 0.3%, and the Nasdaq dropped 1.2% as geopolitical concerns weighed on sentiment. Nasdaq futures were down 1.32% and S&P 500 futures had shed 0.89%.
Analysts continue to forecast a year-over-year improvement in OXY earnings for the current quarter.
4th of July Flash Sale – 50% OFF!
Celebrate Independence Day by investing in your future. For a limited time, get 50% OFF a Knockout Stocks membership and unlock our latest high-conviction stock picks, powered by our proprietary KO Score algorithm.
You’ll also get access to our long-term investment ideas and shorter-term trade opportunities, helping you identify potential opportunities before the crowd.
Sign up to Knockout Stocks today and get 50% OFF to unlock the full list of premium stock picks.
Use coupon code SPECIAL50 for your exclusive discount.
Offer ends soon. Don’t miss out!
