UPDATE: Deutsche Bank Initiates Occidental Petroleum At neutral On Portfolio Uncertainty

Shares of Occidental petroleum OXY are unchanged Tuesday morning, despite a $110 price target (9.8 percent upside) and hold rating by Deutsche Bank.

In the research report, analyst Ryan Todd started by outlying his primary concern: uncertainty with Occidental’s portfolio. Despite strong free cash flow, and what is expected to be accretive restructuring, the uncertainty is enough to initiate the stock at a hold rating.

Related: Deutsche Bank Initiates On Chevron, Sees 14% Upside

Todd writes, “Execution of OXY’s actively marketed MENA (partial interest) assets is the main risk to the story. If the expected MENA transaction values OXY’s MENA portfolio (100%) around $20bn (market chatter indicates investors expecting $15-$20bn), we believe the stock could react positively. Conversely, if OXY disappoints investors, timing-wise and/or from a deal economics standpoint, we believe it would act as a major overhang.”

The $100 price target is based on 6.8 times EV/DACF, inline with peers.