Buffett’s Fondness for Occidental (NYSE:OXY) Stock Continues

Ace investor Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) has once again purchased shares of the oil and gas giant Occidental Petroleum (NYSE:OXY). With this latest round of purchases, Berkshire’s stake in Occidental has increased to 23.8% from 23.6%.

In an SEC filing, Berkshire disclosed its purchase of over 2.2 million additional shares of Occidental in multiple transactions between May 11 and May 15. These transactions were made at prices ranging from $56.80 to $58.46, for an aggregate price of $125.7 million.

Following the recent buy, Berkshire now owns about 213.9 million OXY shares worth $12.4 billion, based on the closing price of $58.14 per share on Tuesday. It also owns more than $9 billion of Occidental preferred stock with an 8% dividend and warrants to buy another $5 billion of common shares at $59.62 apiece.

Interestingly, the additional purchase comes after Buffett said that he does not intend on making an offer to control Occidental entirely but that he would continue buying the stock. During Berkshire’s annual meeting earlier this month, he added that “We love the shares we have.”

Is OXY a Buy or Sell Now?

Occidental stock more than doubled in 2022, driven by higher energy prices and the growing interest of Berkshire Hathaway in the company. However, some of the steam has been lost so far in 2023 due to declining energy prices. OXY stock is down 4.5% year-to-date.

Also, the first quarter results missed the Street’s expectations and reflected a year-over-year decline in revenue and earnings. Following the release of Q1 earnings on May 10, three analysts assigned a Buy rating on OXY stock, while two gave a Hold rating.

On TipRanks, OXY stock has a Moderate Buy consensus rating based on nine Buys, seven Holds, and one Sell. The average price target of $71.59 implies 23.1% upside potential.

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