JPMorgan Raises Forecast On This Warren Buffett Favorite Oil Stock

JP Morgan analyst Arun Jayaram raised the price forecast on Occidental Petroleum Corp. (NYSE:OXY) following its third-quarter FY25 earnings beat.

The company reported adjusted EPS of 64 cents, surpassing the street view of 52 cents, and sales of $6.72 billion slightly came above the consensus of $6.68 billion.

Total average global production in the quarter surpassed the upper end of guidance, reaching 1,465 thousand barrels of oil equivalent per day (Mboed).

Berkshire Hathaway’s (NYSE:BRK) (NYSE:BRK) latest disclosures show that it owned nearly 265 million shares of Occidental Petroleum at the end of Q2, giving Warren Buffett a roughly 27% stake in the company.

Also Read: Occidental Petroleum Likely To Report Lower Q3 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call

Average production in the Permian basin stood at 800 Mboed in the quarter.

For the fourth quarter, the company sees the total production of 1,440-1,480 Mboed, with Permian production of 795-815 Mboed.

Analyst Take

The analyst raised the price forecast to $51 from $50, while keeping a Neutral rating.

The analyst writes that despite strong results, Permian resource growth, and solid guidance, OXY shares underperformed the XLE Index by 119 bps, likely due to management noting potential reallocation of OxyChem and Low Carbon Ventures (LCV) capital to upstream in 2026.

Jayaran says that the company’s CFO Mathew indicated that the $250 million year-over-year reduction in LCV capex could be redirected to Gulf of America (GoA) water flood projects and a modest boost in Oman activity, expanding from 2 to 4 rigs next year.

Additionally, OXY may redirect up to $400 million of sustaining OxyChem capex toward increased Permian activity, including unconventional and EoR projects, adds the analyst.

However, CEO Hollub emphasized the company will avoid aggressively adding production in an oversupplied market, writes the analyst.

Estimates Revised

The analyst revised estimates for 2025/2026 EPS to $ 2.34 and $2.04 (down from $ 2.56 and $2.12, respectively).

The analyst’s assumptions for 2025/2026 oil and gas prices remain unchanged at $ 66.20 per barrel and $ 63.12, and $3.37 per Mcf and $3.86, respectively.

Price Action: OXY shares are up 0.05% at $41.87 at the last check on Wednesday.

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