Analyst Sees Buffett’s Berkshire Eventually Buying All of Occidental Petroleum By

© Reuters Analyst See Warren Buffett’s Berkshire Eventually Buying All of Occidental Petroleum (OXY)

By Sam Boughedda

In a note to clients Thursday, Truist Securities analyst Neal Dingmann said he believes there is a good chance billionaire investor Warren Buffett will buy the remaining 2/3 of Occidental (NYSE 🙂 that he and Berkshire Hathaway (NYSE 🙂 do not own once. The company becomes investment grade.

“Buffett disclosed the purchase of additional Occidental common shares last night resulting in ownership of ~ 1/3 of the company (includes pref ownership) with the investor’s current energy company owning existing IG companies,” said Dingmann. “In our opinion, OXY is quickly on its way to being as IG as debt could go soon

The analyst believes the company is starting to fit the Buffett mold.

“While Berkshire Hathaway Energy (Private) is about 1/3 coal / gas / wind with most future focus on wind / solar, we believe OXY could fit nicely within the portfolio,” the analyst added.

Truist said that while OXY is not yet investment grade, they believe it will achieve it this year “given the material continued FCF / debt repayment among other positive drivers.”

“Further, while 10% in just a couple of years. As such, we believe OXY is ideal to be fully purchased by Buffett once IG status is met and more LCV business is generated.”

Occidental shares have jumped on Thursday but are down on the day at the time of writing.

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