During Berkshire Hathaway’s annual meeting last Saturday, Warren Buffett said the company will not acquire full control of Oxy because “we wouldn’t know what to do with it.” Buffett owns a stake of around 23.5% in Oxy.
Of 27 brokerages covering the stock, 15 have Hold ratings, while 10 have a Buy or Strong Buy rating. At a share price of around $61.00, the implied gain based on a median price target of $69.00 is 13.1%. At the high price target of $93.00, the upside potential is 52.55%.
First-quarter revenue is forecast at $7.37 billion, down 11.4% sequentially and by 13.6% year over year. Adjusted EPS are pegged at $1.25, down 22.1% sequentially and 41.0% lower year over year. For the full 2023 fiscal year, analysts anticipate EPS of $5.38, down 42.4%, on revenue of $29.98 billion, down 19.2%.
Occidental stock trades at 11.2 times expected 2023 EPS, 10.2 times estimated 2024 earnings of $5.91 and 11.5 times estimated 2025 earnings of $5.25 per share. The stock’s 52-week range is $54.30 to $77.13. Occidental pays an annual dividend of $0.72 (yield of 1.19%). Total shareholder return for the past year was negative 2.27%.
Rivian
Rivian Automotive Inc. (NASDAQ: RIVN) produced fewer vehicles in the first quarter as it set about beefing up production of its electric delivery vans. For Rivian and other EV makers, like Lucid, Fisker and Nikola, the cash burn is the compelling metric. Without cash, they cannot scale up, and without scaling up, they have a hard time showing smaller losses.
Rivian also has been in discussions with Amazon about terminating its deal to sell all its electric vans to Amazon. If Rivian gets its way, Amazon is likely to dump some or all of its 17% stake in the company. Rivian does not need that right now.
Of 22 analysts covering the stock, 14 have a Buy or Strong Buy rating and seven more have Hold ratings. At a share price of around $13.40, the upside potential based on a median price target of $25.00 is 86.6%. At the high target of $58.00, the upside potential is about 333%.
Analysts expect Rivian to report first-quarter sales of $661.97 million, down 0.2% sequentially, and up from $95 million in the year-ago quarter. The company is expected to post an adjusted loss per share of $1.58, compared to a prior quarter loss of $1.73 and a year-ago loss per share of $1.43. For the full 2023 fiscal year, analysts are forecasting an adjusted loss per share of $5.61 compared to a prior-year loss of $6.34 per share. Sales are forecast to reach $4.14 billion, up about 150%.
Rivian is not expected to post a profit in 2023, 2024 or 2025. The enterprise value to sales multiple is expected to be 0.7 in 2023. Based on average estimated sales of $8.5 billion and $12.79 billion for 2024 and 2025, respectively, the multiple is 0.3 for 2024 and 0.2 for 2025. The stock’s 52-week trading range is $11.68 to $40.58. Rivian does not pay a dividend, and total shareholder return for the last year was negative 56.56%.
Originally published at 24/7 Wall St.
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