Barclays issued a research report on Tuesday, upgrading its rating on Occidental Petroleum's stock from "Equal Weight" to "Overweight" and significantly raising its price target from $59 to $72. The bank also revised its medium-term oil price forecasts upward, anticipating a multi-year period of robust cash flow for the global oil market.

Analyst Betty Jiang noted in the report that sustained global supply tightness, limited growth in U.S. shale oil output, supply disruptions related to the Iran conflict, and production constraints in the Gulf region are expected to provide long-term support for oil prices. The bank raised its WTI crude price forecasts for 2027 and 2028 to $80 and $75 per barrel, respectively.

Barclays believes that, under its updated oil price scenario, oil-focused exploration and production companies could generate cumulative free cash flow equivalent to over 60% of their enterprise value over the next five years. Current stock valuations, however, do not yet fully reflect this improved earnings outlook.

Specifically regarding Occidental, Barclays analysts stated that the company's ongoing debt reduction, improving capital efficiency, and substantial low-cost resource reserves position it to deliver stronger long-term returns for shareholders. Data shows that Occidental's principal debt has decreased from approximately $20.8 billion at the end of the third quarter of 2025 to $13.3 billion currently, with interest expenses alone reduced by about $550 million from 2025 levels. Barclays expects Occidental to generate sufficient free cash flow by the second half of 2027 to meet its debt targets and fully fund its obligations related to Berkshire Hathaway's preferred shares.

It is noteworthy that Barclays is not the only Wall Street firm recently expressing optimism about Occidental. Previously, Goldman Sachs upgraded the stock from "Sell" to "Neutral" on May 21, and Morgan Stanley also slightly raised its price target. The common assessment among these three institutions is based on declining debt, improving liquidity, and sustained high oil prices.

Influenced by this news, Occidental's stock price has risen recently. The company's first-quarter earnings report was also strong, with adjusted earnings per share reaching $1.06, significantly surpassing the market expectation of $0.59, and free cash flow increasing by 52% year-over-year.