BofA Maintains Buy on Occidental as Inevitable Split-Up Approaches

In a report published Monday, Bank of America Merrill analyst Doug Leggate confirmed Occidental Petroleum OXY will definitely split into multiple parts. After meeting with Occidental's CEO Steve Chazen for the third time in just a few weeks, Leggate believes the company will likely IPO its California unit. Leggate is not certain how Middle East will be monetized, but speculates the move could be through an IPO, a partial sale, or a full sale. The BofA analyst called a buyback in the range of $15 to $20 billion "not only possible but likely." Leggate reiterated his prior view Occidental could be worth at least $150 per share in a breakup. In addition to the comments from Leggate, traders in Occidental shares are responding to a downgrade to Neutral by a UBS analyst. The stock is down about 1 percent to $92.24 at last check.