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Occidental Petroleum Stock (OXY) Gains on Wells Fargo’s Double Upgrade
Occidental Petroleum (OXY) stock rose 5% on Thursday after Wells Fargo double upgraded the oil and natural gas producer to Buy from Sell, citing improved capital efficiency as reflected in Q4 2025 results and Permian Basin productivity. Interestingly, Piper Sandler also upgraded OXY stock to Buy from Hold, citing an increase in crude price amid the U.S.-Iran war and potential lasting supply impacts.
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Wells Fargo Analyst Turns Bullish on Occidental Stock
Wells Fargo analyst Sam Margolin upgraded Occidental Petroleum stock to Buy from Sell and lifted the price target to $69 from $47. The 5-star analyst explained that previously, he was bearish on OXY stock due to capital constraints from the preferred equity, which is unlikely to be redeemed until 2029. While that constraint remains (unless oil prices stay above $100), Margolin noted improved capital efficiency as reflected in Q4 2025 earnings, which supports regular dividend growth and buyback opportunities in the interim years. OXY stock offers a dividend yield of 2.4%.
The analyst believes that if oil prices stay elevated, Occidental Petroleum could redeem these preferred shares in the second half of 2026, freeing up more cash to return to shareholders.
“In a normalized oil price scenario, we still believe OXY can deliver peer-leading regular dividend growth with Permian production above guidance,” said Margolin.
Furthermore, Margolin views Occidental’s capital efficiency trends in the Permian Basin as a catalyst. He noted that the company has adjusted its Permian spending plan to $3.1 billion from $3.9 billion, while maintaining production growth. Margolin attributed this capability to a combination of factors, including solid underlying productivity, a shift to child wells, and improved oil recovery. He believes that OXY can produce slightly ahead of its guidance in 2026 (6% growth) and “resume an accelerated growth trend in 2027 back to $3.5B in capital.”
Is OXY Stock a Buy, Sell, or Hold?
Despite the two upgrades, Wall Street’s consensus rating on Occidental Petroleum stock is a Hold based on nine Holds, four Buys, and three Sell recommendations. The average OXY stock price target of $54.13 indicates 7.3% downside risk from current levels. OXY stock has risen 42% year-to-date.
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