Occidental Petroleum: Even Buffett Bought Too Soon (Rating Downgrade)
Update - May 8, 2023
Berkshire not buying control of Oxy confirms why the stock is capped here.
-Berkshire Hathaway (NYSE:BRK.B) (NYSE:BRK.A) won't buy control of Occidental Petroleum (NYSE:OXY), Chairman and CEO Warren Buffett said during Berkshire's annual meeting in Omaha on Saturday.
-"We wouldn't know what to do with it," he said, adding that he's confident in OXY's management.
-"We may or may not own more" of the stock in the future, he said.
-In March, Berkshire Hathaway (BRK.B) added almost 3.7M more shares to its holdings, bringing its stake in the petroleum producer to ~23.6%.
Original article posted on March 19
- OXY has fallen below $60 again leading to Berkshire Hathaway purchasing more shares.
- Energy prices have fallen to levels consistent with Q3'21 levels when the company earned far close to a $3 to $4 EPS stream.
- The stock isn't priced for lower earnings leaving OXY trading at ~20x '23 EPS targets.
After multiple warnings to investors that one shouldn't overpay for Occidental Petroleum Corporation (NYSE:OXY), even Warren Buffett and Berkshire Hathaway (BRK.B, BRK.A) overpaid for the stock. The independent energy company now faces plunging energy prices that normally occur during weak economic periods. My investment thesis is more Bearish on the stock until oil prices shake out at lower prices.