Occidental Petroleum Corporation (OXY) Intrinsic Value & DCF Valuation
Oil & Gas Exploration & Production · NYSE
Current Price
$58.33
Intrinsic Value
$101.75
+42.7% margin of safety
What Is Occidental Petroleum Corporation's Intrinsic Value?
As of 2026-10-06, the base-case DCF model estimates the intrinsic value of Occidental Petroleum Corporation (OXY) at $101.75 per share, compared with a market price of $58.33, a margin of safety of +42.7%. The base case assumes 1.1% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $89.03 to $116.8. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Occidental Petroleum Corporation (OXY) Undervalued?
At the current price of $58.33, OXY trades well below the base-case intrinsic value estimate, a margin of safety above 30%. By this model the stock looks undervalued, but verify the growth assumptions match your own view before acting.
COMPETITIVE MOAT
↑Strategic Permian Basin Assets
OXY possesses extensive, low-cost reserves in the prolific Permian Basin. This provides a significant advantage in production efficiency and long-term resource access.
↑Carbon Capture Technology Leadership
Pioneering carbon capture, utilization, and storage (CCUS) technologies offers a unique, future-proof competitive edge. This positions OXY for evolving environmental regulations and new revenue streams.
↑Operational Expertise and Scale
Decades of experience in complex E&P operations and significant scale allow for efficient resource extraction. This translates to cost advantages and a strong track record of execution.
INVESTMENT RISKS
↓Transition to Renewable Energy
The global shift towards renewable energy sources poses a long-term threat to demand for fossil fuels. OXY's business model is fundamentally tied to hydrocarbon consumption.
↓Geopolitical Instability
Global political events and conflicts can disrupt supply chains and impact crude oil prices. This introduces significant uncertainty into OXY's operating environment.
↓Execution Risk on CCUS Projects
While CCUS offers a moat, the large-scale implementation and profitability of these complex projects carry inherent execution risks. Delays or cost overruns could impact financial performance.
Base case
OXY base case valuation
Intrinsic Value
$101.75
Margin of safety
+42.7%
Expected annual return
+11.8%
Base case assumptions: 1.1% annual growth, 10.0% discount rate, 10.9x exit multiple, 5 year projection. Data as of 2026-10-06.
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, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. It operates through Oil and Gas and Midstream and Marketing. The Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. This segment also optimizes its transportation and storage capacity and invests in entities. The Midstream and Marketing segment purchases, markets, gathers, processes, transports and stores oil, condensate, NGLs, natural gas, carbon dioxide, and power. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.
Financial Metrics — OXY Stock Valuation Data
Revenue/Share (TTM)
$25.27
FCF/Share (TTM)
$5.33
ROIC (TTM)
40.7%
ROE (TTM)
19.0%
P/FCF
10.9x
EV/EBITDA
4.9x
FCF Yield
9.17%
Debt/Equity
0.35x
Based on trailing twelve-month data, OXY shows a free cash flow per share of $5.33 and a ROIC of 40.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 10.9x and FCF yield of 9.17% 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 $5.33 in free cash flow per share. At the current price of $58.33, 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 10.9x with a free cash flow yield of 9.17%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. 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 ($5.33) 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 0.35x, 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 40.7% reflects how efficiently the company converts invested capital into profit.
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 0.35x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 4.9x, 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 2026-10-06. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.