Occidental Stock Drops 7% as OxyChem Sale Draws Analyst Criticism over Timing, Price

TigerOct 2, 2025 11:35 PM

View all comments（0）



Occidental saw its share price drop by 7% on Thursday, becoming one of the companies with the largest decline in the S&P 500 index. Previously, the company agreed to its OxyChem chemicals arm to Berkshire Hathaway for $9.7 billion. This move was part of the company's attempt to reduce debt after years of costly acquisitions.

Occidental's "problem has been getting our debt down faster," CEO Vicki Hollub told CNBC, following acquisitions of Anadarko Petroleum and CrownRock in 2019 and 2024, respectively, and the company plans to use $6.5 billion in proceeds from the Berkshire deal to pay down debt, achieving its target level of principal debt below $15 billion.

This move will "unlock our stock, and allow shareholders to feel more comfortable, hopefully, to add to their positions and others to come in," Hollub said. "So now we're going to be able to start our sharing purchase program again... This is the last step that we needed in our major transformation that we started 10 years ago."

But the deal's timing is not ideal, TD Cowen analysts said, as the transaction will help the company pay down debt, yet it comes as capital expenditures tied to OxyChem's multi-year growth initiatives are peaking, meaning the free cash flow inflection expected in coming years will be lost.

Analysts at Roth MKM said the sale could weigh on free cash flow growth in coming years, as the unit was expected to contribute significantly to expansion.

Paul Cheng, an analyst from Scotiabank, pointed out that the transaction price seemed too low as he had previously estimated the value of this department to be $12 billion.

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

Comments (0)

Click the $ button, enter the symbol, and select to link a stock, ETF, or other ticker.

Commenting Guidelines

Recommended Articles

Broadcom Stock Forecast: Down Over 30% Since June, Can the Stock Rebound From Here?

On September 16, Broadcom (AVGO) hit a recent intraday low of $335.80, pulling back 32% from its all-time high of $494.20 and almost entirely erasing its year-to-date gains. Yet just a few months ago, Broadcom was hailed by the market as the most certain winner in AI computing power; now, it has become a poster child for unfulfilled expectations. The root of this shift traces back to its Q2 FY2026 financial report released on June 3. While AI semiconductor revenue reached $10.8 billion—up 143% year-over-year—and Q3 guidance projected over 200% year-over-year growth, management merely reiterated its target of "exceeding $100 billion in AI chip revenue by FY2027" as unchanged, declining to raise it. Market expectations, already priced at a P/E ratio of around 90x, lost the fuel to expand further, sending the stock price into a continuous decline. As the share price dropped, its valuation also underwent a reset. Could this now mark a turning point for the stock?

US Stocks Mixed as Dow Drops 160 Points; Tech Stocks Lead, Meta Rises 4.5%

The top leaders of China and the U.S. met in the United States, alongside reports that U.S.-Iran negotiations were seeking to reopen the Strait of Hormuz. U.S. stocks recovered part of their losses, with technology stocks leading the gains. At the close, the Dow Jones Industrial Average fell 0.31% to 51,349.98; the Nasdaq Composite Index rose 0.01% to 26,939.37; and the S&P 500 Index dipped 0.02% to 7,704.13.

Meta Stock Forecast: Muse Monetization Path Is Key as JPMorgan Raises Price Target to $920; Can Stock Hit Record High?

On September 24, Eastern Time, Meta Platforms (META) reached an intraday price of $777.89, hitting a nearly one-year high. Following the Meta Connect event, JPMorgan raised its price target on the company from $820 to $920 while maintaining an Overweight rating. The core reason is that the monetization path for Muse is becoming increasingly clear, leaving the bank more optimistic about Meta's growth potential beyond advertising.

Meta Connect 2026 New Product Roundup: Muse Integrated Into AI Glasses, Can It Drive Meta Revenue Growth?

TradingKey - At the Connect 2026 conference held from September 23 to 24, Meta (META) unveiled the Ray-Ban Meta Audio, third-generation Ray-Ban Meta, and Meta VR Glasses, while upgrading the Meta Ray-Ban Display. The company also announced the integration of its personal AI agent, Muse, into its AI glasses, expanding its product scope from mobile phones and social apps to wearable devices.

The Week Ahead: US-China Summit in Washington, Costco Earnings and Fed Rate Path in Focus

TradingKey - During the week of September 21 to 25, Eastern Time, the US stock market will focus on the meeting between Chinese and US leaders, the Federal Reserve's policy outlook, and economic data such as US new home sales and durable goods orders.

Featured Tools