As of May 22, 2025, Occidental Petroleum Corp's estimated intrinsic value ranges from $36.88 to $190.71 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $50.24 | +22.1% |
| Discounted Cash Flow (5Y) | $50.31 | +22.3% |
| Dividend Discount Model (Multi-Stage) | $39.63 | -3.7% |
| Dividend Discount Model (Stable) | $36.88 | -10.3% |
| Earnings Power Value | $190.71 | +363.7% |
Is Occidental Petroleum Corp (OXY) undervalued or overvalued?
With the current market price at $41.13, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Occidental Petroleum Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.04 | 1.26 |
| Cost of equity | 8.7% | 11.9% |
| Cost of debt | 5.1% | 5.3% |
| Tax rate | 20.3% | 25.6% |
| Debt/Equity ratio | 0.65 | 0.65 |
| After-tax WACC | 6.8% | 8.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $50 | $70,259M | 75.9% |
| 10-Year Growth | $50 | $70,193M | 56.9% |
| 5-Year EBITDA | $31 | $52,443M | 67.7% |
| 10-Year EBITDA | $37 | $57,816M | 47.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $15,561M |
| Discount Rate (WACC) | 8.8% - 6.8% |
| Enterprise Value | $177,018M - $227,405M |
| Net Debt | $22,982M |
| Equity Value | $154,036M - $204,423M |
| Outstanding Shares | 940M |
| Fair Value | $164 - $218 |
| Selected Fair Value | $190.71 |
| Metric | Value |
|---|---|
| Market Capitalization | $38653M |
| Enterprise Value | $61635M |
| Trailing P/E | 12.45 |
| Forward P/E | 11.64 |
| Trailing EV/EBITDA | 4.65 |
| Current Dividend Yield | 369.36% |
| Dividend Growth Rate (5Y) | -5.91% |
| Debt-to-Equity Ratio | 0.65 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $15.07 |
| Discounted Cash Flow (5Y) | 25% | $12.58 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.93 |
| Dividend Discount Model (Stable) | 15% | $5.53 |
| Earnings Power Value | 10% | $19.07 |
| Weighted Average | 100% | $60.18 |
Based on our comprehensive valuation analysis, Occidental Petroleum Corp's weighted average intrinsic value is $60.18, which is approximately 46.3% above the current market price of $41.13.
Key investment considerations:
Given these factors, we believe Occidental Petroleum Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.