Occidental Petroleum Corporation (OXY) Stock Valuation — DCF Analysis
Oil & Gas Exploration & Production · NYSE
Current Price
$56.54
Intrinsic Value
$109
+48.1% margin of safety
COMPETITIVE MOAT
↑Strategic Permian Basin Assets
OXY possesses extensive, high-quality acreage in the Permian Basin. This provides a long-term, low-cost production advantage and significant reserve life.
↑Carbon Capture Technology Leadership
Pioneering carbon capture utilization and storage (CCUS) offers a unique competitive edge. This positions OXY for future environmental regulations and potential new revenue streams.
↑Strong Midstream Infrastructure
OXY's integrated midstream assets, including pipelines and processing facilities, enhance operational efficiency. This reduces transportation costs and provides greater control over the value chain.
INVESTMENT RISKS
↓Commodity Price Volatility
The company's profitability is highly sensitive to fluctuating oil and gas prices. Geopolitical events, like those in the Strait of Hormuz, can cause rapid and significant price swings.
↓Regulatory and Environmental Scrutiny
Increasing environmental regulations and the energy transition pose long-term challenges. OXY faces potential costs and operational adjustments related to emissions and climate policies.
↓Execution Risk on Large Projects
The success of OXY's ambitious CCUS projects and exploration ventures carries inherent execution risks. Delays or cost overruns could impact financial performance and strategic goals.
Base case
OXY base case valuation
A base case discounted cash flow model for OXY estimates an intrinsic value of about $109 per share, against a current price of $56.54. The model assumes 19.2% annual free cash flow growth, a 10.0% discount rate, and a 16x exit multiple.
Intrinsic Value
$109
Margin of safety
+48.1%
Expected annual return
+14.0%
Base case assumptions: 19.2% annual growth, 10.0% discount rate, 16x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the OXY valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Occidental Petroleum Corporation respond.
Open DCF Calculator for OXYCompany Overview
Occidental Petroleum Corporation, along with its various subsidiaries, primarily focuses on the discovery, acquisition, and development of oil and natural gas resources. These operations extend across the United States, the Middle East, Africa, and Latin America. The company's business is organized into three distinct divisions: Oil and Gas, Chemical, and Midstream and Marketing. Within the Oil and Gas division, the company is responsible for exploring, developing, and extracting crude oil, condensate, natural gas liquids (NGLs), and conventional natural gas. The Chemical segment manufactures and commercializes a range of fundamental chemicals, including chlorine, caustic soda, chlorinated organic compounds, potassium-based chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride. This segment also produces vinyl products such as vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing division manages the collection, processing, transportation, storage, procurement, and distribution of diverse energy commodities, specifically oil, condensate, NGLs, natural gas, carbon dioxide, and electrical power. Furthermore, this segment actively trades utilizing its existing transportation and storage assets and strategically invests in other entities. Occidental Petroleum Corporation was established in 1920 and maintains its principal offices in Houston, Texas.
Financial Metrics — OXY Stock Valuation Data
Revenue/Share (TTM)
$23.77
FCF/Share (TTM)
$3.66
ROIC (TTM)
2.6%
ROE (TTM)
12.8%
P/FCF
15.8x
EV/EBITDA
5.9x
FCF Yield
6.34%
Debt/Equity
0.40x
Based on trailing twelve-month data, OXY shows a free cash flow per share of $3.66 and a ROIC of 2.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 15.8x and FCF yield of 6.34% are important context metrics when evaluating OXY's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of OXY?
Occidental Petroleum Corporation currently generates $3.66 in free cash flow per share. At the current price of $56.54, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is OXY undervalued?
OXY trades at a P/FCF ratio of 15.8x with a free cash flow yield of 6.34%. This P/FCF is in a moderate range. However, whether OXY is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value OXY stock using DCF?
To perform a DCF valuation on Occidental Petroleum Corporation: (1) Start with the trailing free cash flow per share ($3.66) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Exploration & Production industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting OXY's risk profile — with a debt-to-equity of 0.40x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to OXY?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Occidental Petroleum Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Exploration & Production trends, then discounting those amounts to today's dollars. OXY's ROIC of 2.6% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect OXY stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For OXY, with a debt-to-equity ratio of 0.40x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 5.9x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See OXY PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value OXY with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.