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OXY's premium valuation and commodity-price sensitivity may warrant waiting for a better entry point.
Occidental Petroleum Corporation (OXY - Free Report) is expected to report a year-over-year increase in both top and bottom lines when it reports second-quarter 2026 results on Aug. 6.
The Zacks Consensus Estimate for revenues is pinned at $7.18 billion, indicating an increase of 11.16% from the year-ago reported figure. The consensus mark for earnings is pegged at $1.96 per share, indicating year-over-year growth of 402.56%. The bottom-line estimate has gone up 6.52% over the past 60 days.
Image Source: Zacks Investment Research
OXY’s Earnings Surprise History
Occidental Petroleum’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 49.72%.
Image Source: Zacks Investment Research
Q2 Production Expectation
For the second quarter of 2026, Occidental Petroleum expects production of 1,390-1,430 thousand barrels of oil equivalent per day (Mboe/d). Output from the Permian Resources segment is pegged at 783-803 Mboe/d. International operations are expected to produce in the range of 205-211 Mboe/d.
The Zacks Consensus Estimate for second-quarter production volume is currently pegged at 1,415.7 Mboe/d.
What the Zacks Model Unveils
Our model does not predict an earnings beat for OXY this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: OXY has an Earnings ESP of +1.75%.
Zacks Rank: Occidental Petroleum currently holds a Zacks Rank #4 (Sell).
Earnings Surprise by Others This Season
Some companies in the same sector that have the right combination of the two factors for an earnings beat this season are National Energy Services Reunited Corp. (NESR - Free Report) , Calumet Inc. (CLMT - Free Report) and Sempra Energy (SRE - Free Report) . NESR, CLMT and SRE have an Earnings ESP of +7.80%, +169.57% and +0.79%, respectively. NESR currently sports a Zacks Rank #1, CLMT has a Zacks Rank # 2 and SRE carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Major Drivers Behind OXY’s Q2 Earnings Performance
Occidental Petroleum's second-quarter earnings are likely to have benefited from the predominantly domestic operations, which reduce its exposure to disruptions caused by global events.
OXY has been generating cash flow and utilizing the same to reduce debts, which is likely to have a positive impact on earnings. The company retired debts worth $15.6 billion over the past 22 months, which lowered annual interest expenses by $830 million. This might have a positive impact on second-quarter earnings performance.
Operational efficiencies are expected to generate more than $1.2 billion in free cash flow in 2026, providing the company with greater financial flexibility to reduce debt, repurchase shares and fund growth initiatives, thereby supporting overall performance.
In the second quarter, OXY’s production volume in the Gulf of America region is expected to drop modestly due to planned facility maintenance and the beginning of the tropical weather season.
Occidental Petroleum's second-quarter volumes from the Middle East are likely to have been affected by temporary operational constraints at Al Hosn that started in mid-March and are expected to have eased before the end of the second quarter. Higher prices under production-sharing contract terms are also anticipated to lower net production volumes.
OXY’s Midstream earnings are expected to have remained strong in the second quarter, supported by gas marketing optimization opportunities arising from the wide Waha-to-Gulf Coast natural gas price spread. However, sulfur sales are likely to have been temporarily affected by logistics disruptions related to the ongoing Middle East conflict.
OXY’s Price Performance
OXY’s shares have gained 20.1% in the past six months compared with the industry’s growth of 12.9%.
Image Source: Zacks Investment Research
OXY Stock Trading at a Premium
Occidental Petroleum’s shares are somewhat expensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 6.12X compared with the industry average of 5.35X.
Image Source: Zacks Investment Research
Investment Thesis
Occidental Petroleum has continued to benefit from its strong U.S. footprint and disciplined emphasis on the Permian Basin, where the core development areas are delivering solid performance. OXY’s cost management initiatives and decision to sell the chemical business allowed it to further lower debts and boost margins.
The company has not been active in hedging, as a consequence, the fluctuation in commodity prices during the second quarter might have impacted its earnings.
Summing Up
Occidental Petroleum’s strong cash flow generation, continued debt reduction initiatives and incremental contributions from recent acquisitions are likely to have supported its overall performance. Additionally, the company’s predominantly domestic operations are expected to have provided greater earnings stability by limiting exposure to global disruptions.
However, given OXY’s sensitivity to commodity price volatility and its current premium valuation, investors may be better off waiting for a more attractive entry point before considering the stock.
View the Zacks #1 Rank List
Image: Bigstock
Occidental Petroleum Set to Report Q2 Earnings: How to Play the Stock?
Key Takeaways
Occidental Petroleum Corporation (OXY - Free Report) is expected to report a year-over-year increase in both top and bottom lines when it reports second-quarter 2026 results on Aug. 6.
The Zacks Consensus Estimate for revenues is pinned at $7.18 billion, indicating an increase of 11.16% from the year-ago reported figure. The consensus mark for earnings is pegged at $1.96 per share, indicating year-over-year growth of 402.56%. The bottom-line estimate has gone up 6.52% over the past 60 days.
Image Source: Zacks Investment Research
OXY’s Earnings Surprise History
Occidental Petroleum’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 49.72%.
Image Source: Zacks Investment Research
Q2 Production Expectation
For the second quarter of 2026, Occidental Petroleum expects production of 1,390-1,430 thousand barrels of oil equivalent per day (Mboe/d). Output from the Permian Resources segment is pegged at 783-803 Mboe/d. International operations are expected to produce in the range of 205-211 Mboe/d.
The Zacks Consensus Estimate for second-quarter production volume is currently pegged at 1,415.7 Mboe/d.
What the Zacks Model Unveils
Our model does not predict an earnings beat for OXY this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: OXY has an Earnings ESP of +1.75%.
Zacks Rank: Occidental Petroleum currently holds a Zacks Rank #4 (Sell).
Earnings Surprise by Others This Season
Some companies in the same sector that have the right combination of the two factors for an earnings beat this season are National Energy Services Reunited Corp. (NESR - Free Report) , Calumet Inc. (CLMT - Free Report) and Sempra Energy (SRE - Free Report) . NESR, CLMT and SRE have an Earnings ESP of +7.80%, +169.57% and +0.79%, respectively. NESR currently sports a Zacks Rank #1, CLMT has a Zacks Rank # 2 and SRE carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Major Drivers Behind OXY’s Q2 Earnings Performance
Occidental Petroleum's second-quarter earnings are likely to have benefited from the predominantly domestic operations, which reduce its exposure to disruptions caused by global events.
OXY has been generating cash flow and utilizing the same to reduce debts, which is likely to have a positive impact on earnings. The company retired debts worth $15.6 billion over the past 22 months, which lowered annual interest expenses by $830 million. This might have a positive impact on second-quarter earnings performance.
Operational efficiencies are expected to generate more than $1.2 billion in free cash flow in 2026, providing the company with greater financial flexibility to reduce debt, repurchase shares and fund growth initiatives, thereby supporting overall performance.
In the second quarter, OXY’s production volume in the Gulf of America region is expected to drop modestly due to planned facility maintenance and the beginning of the tropical weather season.
Occidental Petroleum's second-quarter volumes from the Middle East are likely to have been affected by temporary operational constraints at Al Hosn that started in mid-March and are expected to have eased before the end of the second quarter. Higher prices under production-sharing contract terms are also anticipated to lower net production volumes.
OXY’s Midstream earnings are expected to have remained strong in the second quarter, supported by gas marketing optimization opportunities arising from the wide Waha-to-Gulf Coast natural gas price spread. However, sulfur sales are likely to have been temporarily affected by logistics disruptions related to the ongoing Middle East conflict.
OXY’s Price Performance
OXY’s shares have gained 20.1% in the past six months compared with the industry’s growth of 12.9%.
Image Source: Zacks Investment Research
OXY Stock Trading at a Premium
Occidental Petroleum’s shares are somewhat expensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 6.12X compared with the industry average of 5.35X.
Image Source: Zacks Investment Research
Investment Thesis
Occidental Petroleum has continued to benefit from its strong U.S. footprint and disciplined emphasis on the Permian Basin, where the core development areas are delivering solid performance. OXY’s cost management initiatives and decision to sell the chemical business allowed it to further lower debts and boost margins.
The company has not been active in hedging, as a consequence, the fluctuation in commodity prices during the second quarter might have impacted its earnings.
Summing Up
Occidental Petroleum’s strong cash flow generation, continued debt reduction initiatives and incremental contributions from recent acquisitions are likely to have supported its overall performance. Additionally, the company’s predominantly domestic operations are expected to have provided greater earnings stability by limiting exposure to global disruptions.
However, given OXY’s sensitivity to commodity price volatility and its current premium valuation, investors may be better off waiting for a more attractive entry point before considering the stock.