Occidental Petroleum Stock Is Off Its Peak - Time to Buy OXY or Short OTM Puts?

I discussed selling OXY banal connected March 29 arsenic good arsenic shorting out-of-the-money (OTM) telephone options for existing investors ("Occidental Petroleum Stock May Be astatine a Peak - Time to Sell OXY Covered Calls?")

For example, the $70 telephone enactment declaration expiring May 1 had a midpoint premium of $1.80 (i.e., 34 days to expiry). That onslaught terms was implicit 7% higher than the $65.32 terms astatine the time. The play provided a 2.755% output (i.e., $1.80/$65.32 = 0.02755).

Today, that telephone enactment has dropped to conscionable 7 cents, making that a large play. The covered telephone capitalist does not person to hold until expiry to participate an bid to “Buy to Close” to screen this abbreviated play.

Now it mightiness marque consciousness for traders and/or existing shareholders to bargain OXY banal present oregon to merchantability out-of-the-money (OTM) puts.

Analysts person been hiking their forecasts and terms targets for Occidental Petroleum. For example, Yahoo! Finance shows that analysts' net per stock (EPS) estimates for 2026 person risen from $2.16 per stock 30 days agone to $4.20 now.

Moreover, Seeking Alpha reports that the mean EPS estimation from 23 banal analysts is present $4.39 for 2026. That means OXY banal has a debased price/earnings (P/E) ratio:

$53.79/$4.39 EPS est. = 12.25x

Historical Forward P/E Average (past 5 years): 13.09x (Morningstar)

In different words, based connected this mean guardant P/E, OXY banal could beryllium worthy $57.47 (i.e., $13.09 x $4.39).

Yahoo! Finance reports that the mean terms people (PT) from 26 analysts is present $62.32 per share. That's up from $60.28 3 weeks ago, arsenic seen successful my anterior Barchart article. Similarly, Barchart's mean survey terms people is present $62.50, up from $59.11.