Barclays pared its rating on Occidental Petroleum, the fourth-largest U.S. oil company, to ''equal weight,'' saying investors are overlooking the chance that the company may disappoint on production targets at its California silt and shale properties and the expenses involved in those projects.
''The 13% outperformance over the past 30 days (vs. the EPX index) seems to overlook the required capital spending, risks, and the time it will take to develop the resource; the outperformance seems excessive, in our view,'' Barclays analyst Thomas Driscoll said in a note to clients, Barron's reported.
In the past month, shares of Occidental (OXY) are higher by almost 6% while shares of rivals Exxon Mobil (XOM), Chevron (CVX) and ConocoPhillips (COP), the three largest U.S. oil companies respectively, are all lower.
Last month, California-based Occidental said its first-quarter profit jumped 46% to $1.5 billion, or $1.90 per share, from $1.1 billion, or $1.31 a share, a year earlier. The company plans to spend $6.8 billion on capital projects this year.