As of May 23, 2025, Occidental Petroleum Corp has a Discounted Cash Flow (DCF) derived fair value of $50.24 per share. With the current market price at $41.08, this represents a potential upside of 22.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $50.31 |
| DCF Fair Value (10-year) | $50.24 |
| Potential Upside (5-year) | 22.5% |
| Potential Upside (10-year) | 22.3% |
| Discount Rate (WACC) | 6.8% - 8.8% |
Revenue is projected to grow from $26725 million in 12-2024 to $35430 million by 12-2034, representing a compound annual growth rate of approximately 2.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 26725 | 5% |
| 12-2025 | 27634 | 3% |
| 12-2026 | 28715 | 4% |
| 12-2027 | 29135 | 1% |
| 12-2028 | 29718 | 2% |
| 12-2029 | 30935 | 4% |
| 12-2030 | 32406 | 5% |
| 12-2031 | 33054 | 2% |
| 12-2032 | 33715 | 2% |
| 12-2033 | 34513 | 2% |
| 12-2034 | 35430 | 3% |
Net profit margin is expected to improve from 11% in 12-2024 to 14% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 2896 | 11% |
| 12-2025 | 3322 | 12% |
| 12-2026 | 3607 | 13% |
| 12-2027 | 3815 | 13% |
| 12-2028 | 4045 | 14% |
| 12-2029 | 4369 | 14% |
| 12-2030 | 4576 | 14% |
| 12-2031 | 4668 | 14% |
| 12-2032 | 4761 | 14% |
| 12-2033 | 4874 | 14% |
| 12-2034 | 5004 | 14% |
with a 5-year average of $4638 million. Projected CapEx is expected to maintain at approximately 17% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 5082 |
| 12-2026 | 5496 |
| 12-2027 | 5599 |
| 12-2028 | 5367 |
| 12-2029 | 5028 |
| 12-2030 | 5192 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 44 |
| Days Inventory | 69 |
| Days Payables | 127 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 7242 | 817 | 3566 | (92) | 2952 |
| 2026 | 10456 | 1183 | 4940 | 160 | 4173 |
| 2027 | 10837 | 1251 | 5012 | 100 | 4474 |
| 2028 | 10915 | 1327 | 5112 | 26 | 4450 |
| 2029 | 11012 | 1433 | 5322 | 135 | 4123 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 50.31 | 22.5% |
| 10-Year DCF (Growth) | 50.24 | 22.3% |
| 5-Year DCF (EBITDA) | 31.35 | -23.7% |
| 10-Year DCF (EBITDA) | 37.07 | -9.8% |
Is Occidental Petroleum Corp (OXY) a buy or a sell? Occidental Petroleum Corp is definitely a buy. Based on our DCF analysis, Occidental Petroleum Corp (OXY) appears to be moderately undervalued with upside potential of 22.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $41.08.