Evercore ISI Upgrades Occidental Petroleum, Citing Improved Cash Flow and Deleveraging

Evercore ISI has upgraded its rating for Occidental Petroleum (OXY) to "Outperform" from a previous "Underperform" rating. The investment brokerage also increased its price target for the oil producer's stock to $65 from $58, signaling renewed confidence after a period of underperformance relative to its peers.

The upgrade is primarily driven by Occidental's successful deleveraging efforts and structurally lower operating costs. According to Evercore, these factors have fundamentally reshaped the company's free cash flow profile, positioning it to better capitalize on underlying crude oil market conditions.

Evercore's analysis suggests that the market has not yet fully accounted for Occidental's strengthened financial position. The firm believes the improvements could support a return to significant shareholder distributions, including the potential resumption of share buybacks in the second half of 2028.

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While noting that Occidental's projected free cash flow growth may trail some competitors, Evercore stated the investment case is built on improving fundamentals from a discounted valuation rather than superior production growth. The firm cited lower well costs, declining maintenance capital needs, and a long-life resource base across its U.S. onshore, Gulf of Mexico, and Persian Gulf assets as factors supporting a more resilient cash generation profile.