Occidental Petroleum shares are at a one-year high. What are investors waiting for?

Shares of Occidental Petroleum rose sharply in trading on February 19 - after the energy giant reported a profit for the fourth quarter of last year above expectations and gave a strong forecast on reducing spending for the current year. The securities were supported not only by the financial indicators: the stock prices in the sector were also influenced by the growth of oil prices.

Occidental Petroleum shares rose 9.4% to $51.53 in Thursday trading, their highest since Feb. 20, 2025. The stock posted its biggest single-day gain since last April, when it jumped 11%, Barron's noted. Occidental shares have added more than 25% since the start of 2026.

Rival securities also rose in price, though not nearly at the same pace, as tensions between the US and Iran pushed oil prices up. WTI futures are up 6% since the beginning of the week and 16% since the beginning of the year. ConocoPhillips shares added 1% on Feb. 19, while Chevron and Exxon Mobil rose 0.5% and 0.2%, respectively.

Adjusted earnings of Occidental in the fourth quarter of 2025 amounted to $0.31 per share, while Wall Street expected only $0.17, writes Barron's. At the same time, revenue decreased by 9.4% to $5.11 billion compared to the fourth quarter of 2024 and fell short of Wall Street's forecast ($5.55 billion).

Revenue from the oil and gas segment, which accounts for the bulk of Occidental's revenue, fell 14.4% year over year to $4.81 billion.

Despite lower sales in the latest quarter, the stock appears to have been supported by the company's outlook for 2026, Barron's wrote. Occidental expects capital expenditures in the range of $5.5 billion to $5.9 billion, while Wall Street estimated them at $6.4 billion. TD Cowen analyst Robert Hodges noted on Thursday that it was the forecast that was the "main highlight" of the report: it assumes a "significant reduction in capital expenditures" to a level more than 10% below consensus, Barron's quoted him as saying.

According to Hodges, the decline is mainly due to improved efficiency, reduced activity in the unconventional oil production segment in the U.S. and lower exploration spending.

Occidental raised its quarterly dividend by more than 8% to $0.26 per share. The company emphasized that its quarterly dividend per share has "doubled over the past four years."

Most analysts are cautious about Occidental Petroleum shares, according to MarketWatch. Securities have 18 Hold ratings, meaning a recommendation to hold, out of 31 in total - more than half. At the same time, nine analysts advise to buy (Buy and Overweight), four - to sell (Sell). A month ago, the stock had one more Buy recommendation and one less Hold recommendation. And the average target price of $49.4 is slightly lower than the current one.

This article was AI-translated and verified by a human editor