Occidental Petroleum Corporation (OXY) Intrinsic Value & DCF Valuation
Oil & Gas Exploration & Production · NYSE
Current Price
$55.40
Intrinsic Value
$62.84
+11.8% margin of safety
What Is Occidental Petroleum Corporation's Intrinsic Value?
As of 2026-07-30, the base-case DCF model estimates the intrinsic value of Occidental Petroleum Corporation (OXY) at $62.84 per share, compared with a market price of $55.4, a margin of safety of +11.8%. The base case assumes -0.8% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $54.96 to $72.17. 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 $55.4, OXY trades about 11.8% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Extensive Proven Reserves
OXY's substantial proved reserves provide a durable foundation for future production and cash flow. This resource base offers significant visibility and resilience.
↑Strategic Permian Basin Assets
Concentrated acreage in the prolific Permian Basin offers operational efficiencies and cost advantages. This positions OXY favorably within a key U.S. oil-producing region.
↑Diversified Operations
OXY's presence in both upstream exploration/production and midstream/chemical segments offers some diversification. This can help mitigate volatility in any single business line.
INVESTMENT RISKS
↓Execution Risk on Acquisitions
OXY has a history of significant acquisitions, which carry integration and execution risks. Failure to realize expected synergies could negatively impact financial performance.
↓Geopolitical Instability
Global political events and conflicts can disrupt supply chains and impact crude oil prices. This external factor introduces uncertainty into OXY's operating environment.
↓Operational and Environmental Incidents
The nature of oil and gas operations carries inherent risks of accidents, spills, or equipment failures. Such incidents can lead to significant financial and reputational damage.
Base case
OXY base case valuation
Intrinsic Value
$62.84
Margin of safety
+11.8%
Expected annual return
+2.6%
Base case assumptions: -0.8% annual growth, 10.0% discount rate, 15x exit multiple, 5 year projection. Data as of 2026-07-30.
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)
$23.77
FCF/Share (TTM)
$3.66
ROIC (TTM)
2.6%
ROE (TTM)
12.8%
P/FCF
15.4x
EV/EBITDA
5.8x
FCF Yield
6.47%
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 15.4x and FCF yield of 6.47% 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 $55.40, 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 15.4x with a free cash flow yield of 6.47%. 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% means the company's return on invested capital sits below the level that typically clears 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 5.8x, 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 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.