BofA analyst Jean Ann Salisbury raised the firm’s price target on Occidental (OXY) to $47 from $44 and keeps a Neutral rating on the shares after the company reported the sale of its chemical business, Oxychem, to Berkshire Hathaway (BRK.A) for $9.7B. The stock’s drop of 7% on the news can be tied to no transfer of environmental liabilities, pricing in a near to tax free transaction potentially swapping preferreds for Oxychem and the price being $300M below initial reporting from the Financial Times on Sunday of a deal for Oxychem worth $10B, the analyst tells investors. However, the deal adds $4 per share in value to the firm’s model, offset by increased environmental liabilities of $1 per share, the analyst added.
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