Morgan Stanley Has Positive Outlook On Occidental Petroleum Corporation

In a report published Friday, Morgan Stanley analyst Evan Calio reiterated an Overweight rating and $120.00 price target on

. In the report, Morgan Stanley noted, “With the Large Cap E&Ps having pulled back 10% since 9/1/14 (vs WTI down 5% and SPX down 3%), we believe the group is oversold and see value across the space. Given a catalyst-rich outlook into YE2014 and onwards into 2015, we believe OXY is attractive. The company's 60MM share buyback authorization increase, despite having been expected, should be supportive for the shares. The announcement highlights what we estimate to be a $15Bn+buyback potentially executed by YE2016. While OXY's Board left DPS unchanged at $2.88 annually, we believe it is likely that the dividend will be raised 10-15% in January. Combined with a 9% cash flow per debt adjusted share CAGR over 2014-16 (pro-forma for CRC spinoff) vs 6% for CVX and 4% for XOM, this leads us to strongly prefer OXY to the two US Majors. OW and $120 PT reiterated.” Occidental Petroleum Corporation closed on Thursday at $95.22.