The first fiscal quarter of 2022 has come to a close, and with it, Occidental Petroleum Corporation (NYSE: OXY) has released its earnings report to celebrate strong profits as we move into the summer season. Of course, high oil prices may have helped contribute to this momentum but these gains certainly improved the company's standing from a fairly decent loss in the same quarter one year ago.
OXY Outperforms the Most of the Market
As a matter of fact, OXY's most recent earnings report registered a net income of $4.7 billion. That is a major improvement from the $346 million loss they reported in 2021th same quarter of 2021. On top of that, earnings per share for Occidental Petroleum came in at $4.65. This is also a big step up from the same period one year ago, when OXY posted an EPS loss of $0.36. Similarly, adjusted earnings per share jumped from $0.15 to $2.12.
Also detailed in OXY's earnings report, the company had revenue of $$8.5 billion, which is $3 billion higher than the same period last year. Finally, and most importantly, each one of these numbers beat Wall Street estimates, which had expected sales to reach $7.8 billion (for the quarter) with a net income of $1.9 billion.
By comparison, the market has been mixed lately, with the Dow Jones Industrial Average seeing only a bump of 0.15 percent, to 31,928.62 and the Standard & Poor's 500 dipping more than 0.8 percent, to 3,941.48. And while OXY share value did slip a little—down 0.54 percent, to $65.07—it still fared much better than the S&P. As a matter of fact, Occidental was the best-performing stock in the Standard & Poor's 500 Index for the first fiscal quarter of 2022.
Unfortunately, this was not enough to surmount its 52-week high of $69.17, which the stock recorded on May 17.
OXY Underperforms Competition
While Occidental Petroleum Corp stock seems to be holding strong above most of the market, it still did not manage to beat many of their competitors. For example, Exxon Mobil Corp (NYSE: XOM) added 0.54 percent to $94.40. Chevron Corporation (NYSE: CVX) also grew by 0.54 percent to a value of $172.64. Both ExxonMobile and Chevron Corporation outpaced ConocoPhillips, which grew by only 0.42 percent, to $109.48.
Trading volume, in May week 3 reached 19.8 million. This is 11.2 million lower than its 50-day average trading volume of 31 million.
Berkshire Hathaway Is Betting on Oil
Occidental Petroleum is likely performing well because of the rising price of oil. This is a commodity that most industrialized nations cannot operate without, and when prices soar, profit grows. And for the first quarter of 2022, the average price for a barrel of Brent crude oil skyrocketed more than 50 percent since first quarter of 2021, from $61.10 to $97.36.
That in mind, it makes a bit of sense that Warren Buffet's company Berkshire Hathaway bought a handful of Occidental Petroleum Corp shares. At the recent Berkshire Hathaway annual meeting, the company revealed they purchased a 14 percent stake in Occidental. And then only a few days after that, they revealed the purchase of another 5.9 million shares. These shares are worth nearly $9 billion.
Berkshire Hathaway has only recently become a fervent supporter of Occidental Petroleum Corporation. While the company may have been founded more than a century ago—in 1920—Berkshire Hathaway acquired $10 billion worth of Occidental preferred stock when they assisted in financing Occidental's 2019 purchase of Anadarko Petroleum Corporation. On top of that, it is likely they will buy another $5 billion worth of shares, at a price of $59.62 per share.
Analysts Advise This is A Good Time to Buy OXY Stock
According to more than two dozen Wall Street analysts who consistently offer twelve-month price targets over the last three months, the average price target for Occidental Petroleum Corporation (NYSE: OXY) would be around $72. This is roughly the median forecast with $90 on the high end and $43 on the low. More importantly, this average price target represents an increase of 11.77 percent form the most recent price of $65.31.
With this in mind, the broad consensus among investment analysts is to buy Occidental Petroleum Corporation stock. This rating has remained steady since May, when it was first upgraded from a Hold rating.
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