Occidental Tumbles 0.9 as Debt Woes Overshadow Permian Strength Trading Volume Ranks 242nd

Occidental Petroleum (OXY) closed 0.90% lower on August 18, 2025, with a trading volume of $0.38 billion, ranking 242nd in market activity. The stock's performance followed a recent downgrade by Morgan Stanley to Equalweight from Overweight, reflecting concerns over its elevated debt load. The firm noted OXY's debt-to-EBITDA ratio is projected to reach 2x by year-end 2025, with total debt standing at $24.2 billion. While Occidental has repaid $7.5 billion since its CrownRock acquisition, paused share buybacks and preferred redemptions remain in place until leverage targets are met.

Analysts highlighted the company's domestic asset strength as a strategic advantage. Occidental's dominant position in the Permian Basin, coupled with production in the Rockies and Gulf of Mexico, provides a resilient foundation for low-cost oil and gas output. The firm's diversified portfolio, including natural gas liquids and carbon capture initiatives, enhances cash flow stability amid commodity price fluctuations. However, its return on equity (13.78%) trails the industry average of 14.57%, signaling potential operational efficiency gaps compared to peers.

Recent financial results showed mixed signals. Q2 2025 earnings exceeded estimates by 14.71%, with adjusted EPS at $0.39 and revenue of $6.46 billion. Despite strong top-line performance, shareholder yield projections lag behind industry benchmarks, with 2025 returns estimated at 2% versus a peer median of 7%. CFRA raised its price target to $50 while maintaining a Hold rating, citing enterprise value to EBITDA and discounted cash flow models. Morgan Stanley's $52 target aligns with current valuation ranges as the company works toward balance sheet normalization by late 2026.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to present delivered a compound annual growth rate (CAGR) of 6.98%, with a maximum drawdown of 15.46% recorded during the backtest period. The approach showed steady growth overall, though mid-2023 volatility underscores the need for risk management in volume-driven trading strategies.