OXY Has Fallen 22% From Its High. Is Occidental Petroleum Actually Cheap Now?

Key Stats for Occidental Petroleum Stock

• Current Price: $51.82
• Target Price (Mid): ~$46
• Street Target: ~$66
• Potential Total Return: ~-11%
• Annualized IRR: ~-3% / year
• Earnings Reaction: -7.11% (May 5, 2026)
• Max Drawdown: -21.77% (June 18, 2026)

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What Happened?

Occidental Petroleum (OXY) looks like a textbook dip to buy. The shares closed at $51.82 on June 18, about 22% below the 52-week high of $67.45 they hit in March. It is the steepest drawdown of the past year, and it landed on a company that just beat first-quarter estimates by more than 80% and cut principal debt to $13.3 billion.

The catalyst was not a problem with the business. It was peace. On June 17, the US and Iran signed an agreement that reopens the Strait of Hormuz and begins waiving sanctions on Iranian oil. WTI crude fell as much as 3.5% to an intraday low of $73.60, and energy stocks sold off as the geopolitical premium that powered the sector for months drained away. OXY, whose earnings track crude more closely than almost any large-cap peer, fell with it.

So the question writes itself: better company, cheaper stock, and the only thing that changed is that oil got less scary. Is this the entry point? The answer is less obvious than the setup suggests.

What the Selloff Is Really Pricing

The stock chart shows the war premium leaving. What it does not show is how much of OXY’s recent earnings power leaned on that premium. First-quarter adjusted EPS of $1.06 crushed the $0.59 Street estimate, a beat of more than 80%. But CFO Sunil Mathew was candid that prices did much of the work, noting OXY generated roughly 52% higher free cash flow from continuing operations than a year earlier, “even with oil prices roughly in line with the first quarter of 2025.” The structural progress is real. The price tailwind that amplified it is now reversing.

The Bull Case Has Substance

This is not a falling knife with nothing underneath it. The balance sheet turnaround is the strongest part of the story, and management delivered it. Mathew said OXY cut principal debt to $13.3 billion from about $20.8 billion at the end of last year’s third quarter, with a clear next milestone: “Our near-term cash flow priority is to reduce principal debt to $10 billion.” That work lowers the interest run rate to roughly $845 million a year, about $550 million below 2025.

Operations held up, too. OXY produced 1.426 million barrels of oil equivalent per day in Q1, beating guidance, with a record 98% topside uptime in the Gulf of America. It is targeting more than $1.2 billion of incremental free cash flow in 2026 before any help from higher prices. Wall Street still sees room: the mean target of ~$66 implies about 27% upside, and Goldman Sachs recently upgraded OXY to Neutral from Sell on its debt progress.

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Where the Valuation Turns

On peer multiples, OXY screens cheap. It trades at 4.42x EV/EBITDA on a next-twelve-months basis, below ExxonMobil at 6.49x and Canadian Natural Resources at 5.58x, and near the 4.24x median for its group. After a 22% drop, that looks like value.

But cheap against peers is not cheap against its own cash flows. The market is refusing to capitalize on the recent earnings spike because it doubts the oil price behind it will last. That skepticism is rational, because OXY’s earnings ceiling is set by where crude trades, not by how efficiently it drills. With the war premium gone and Iranian barrels returning, the forward assumptions that justify a higher price are exactly the ones now in question. Capital returns are capped too: a preferred equity redemption comes due in August 2029, and the $10 billion debt target takes priority, which limits buyback flexibility for the next few years.

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TIKR Advanced Model Analysis

Here is the number bulls will not like. On its mid-case assumptions, the TIKR Valuation Model puts fair value at around $46, below today’s $51.82. That implies a potential total return of around -11% over the next four to five years, or roughly -3% a year. The model is not calling OXY a bad company. It is saying the price already reflects the good news, and the recent pullback only brought it closer to a fair value that still sits underneath.

• Current Price: $51.82
• Target Price (Mid): ~$46
• Potential Total Return: ~-11%
• Annualized IRR: ~-3% / year

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The mid case leans on modest Permian volume growth, about 0.8% revenue CAGR on a record production base near 1.44 million BOE per day, with margins supported by the cost program management, which is targeting another $500 million in oil and gas savings this year. The primary risk is oil prices. The high case needs crude to stay elevated, which lifts the target toward $59 and flips the return positive. The downside is a mid-cycle reversion that compresses the very earnings the price depends on.

Conclusion

The selloff looks like an opportunity, but the model says the fear is rational, not excessive. Watch realized oil prices, and the next checkpoint is Q2 2026 earnings in early August. If free cash flow stays resilient with crude in the mid-$70s, the structural story is carrying the stock, and the valuation bears are wrong. If cash flow slips back toward last year’s depressed levels as prices normalize, the $46 fair value will look generous rather than conservative. The deciding variable is not the company. It is the barrel.

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Should You Invest in Occidental Petroleum?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Occidental Petroleum, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Occidental Petroleum alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!