Predicting is easy. Predicting accurately is another story altogether. However, I feel good about making the following prediction: Occidental Petroleum (OXY 1.80%) stock is a buy before May 6.
What's special about May 6? That's the date Occidental Petroleum is scheduled to hold a conference call to discuss its first-quarter financial results. The oil and gas producer will release its Q1 results following the market close on the previous day. My hunch is that Occidental will have very good news for investors in its next quarterly update.
Image source: Getty Images.
Why Oxy stock is a buy
Wall Street analysts surveyed by S&P Global (SPGI +0.17%) expect Occidental to report Q1 adjusted earnings per share of $0.70. But the company has a great track record of handily beating analysts' estimates. I think it should be able to top consensus expectations again.
For one thing, the war with Iran drove oil and gas prices significantly higher throughout much of Q1. Occidental's revenue, earnings, and free cash flow should reflect these higher prices when the company announces its Q1 results.
Occidental projects significant operational efficiency gains in 2026, boosting free cash flow by over $1.2 billion. We could begin to see some of the fruits of the company's streamlining in Q1.
Importantly, Occidental completed its sale of OxyChem to Berkshire Hathaway (BRKA 0.22%) (BRKB 0.53%) for $9.7 billion in January. This divestiture gives Oxy a boatload of cash to accelerate debt reduction (something that investors will cheer).
Speaking of Berkshire Hathaway, its chairman, legendary investor Warren Buffett, is a big fan of Occidental. In recent years, Buffett led Berkshire to build a 26.7% stake in the oil and gas company. When Buffett likes a stock that's poised to beat earnings estimates, it's definitely one to have on your radar screen.
NYSE: OXY
Key Data Points
Two ways the prediction could be derailed
My prediction could admittedly be derailed. Occidental's stock has soared year to date as oil prices rose. Great expectations for the Q1 results could already be fully baked into the share price. No one knows what will unfold in the Iran conflict between now and May 6, either. Occidental could deliver a stellar Q1 update, but it's overshadowed by developments in the Middle East.
However, I stand by my prediction about buying this oil stock before its Q1 update. Even if Occidental doesn't pop on May 6, it should still be a winner for investors over the next 10 years.
