Jim Cramer Isn't a Big Fan of This Buffett Stock

Occidental Petroleum (OXY) is facing contrasting investor sentiment, with Jim Cramer expressing bearishness despite its status as a 'Buffett stock.' However, a Bank of Nova Scotia analyst recently upgraded OXY, citing the strategic OxyChem asset sale to Berkshire Hathaway as a key driver for debt reduction, potential share repurchases, and dividend growth. The article suggests OXY, currently trading at 16.1x forward P/E with a 2.2% dividend yield, represents a cheap long-term commodity play, contingent on management's ability to leverage the sale for operational efficiencies amid a volatile oil market.

Analysis

Investing Jim Cramer Isn’t a Big Fan of This Buffett Stock Oct 5, 2025 | Updated 1:22 PM ET This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them. Key Points - Jim Cramer told a viewer they “don’t want to be in” Occidental, a Buffett stock that’s gone south in recent months. - Despite Cramer’s views, I view OXY as a cheap commodity play that’s a great long-term hold, especially after the OxyChem sale. - Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor) I was quite surprised to hear that Mad Money host Jim Cramer wasn’t too upbeat on shares of Occidental Petroleum (NYSE:OXY) during his show’s Lightning Round segment recently. Indeed, Occidental is now quite a well-known Warren Buffett stock, one that’s continued to decline since Berkshire Hathaway (NYSE:BRK-B) initiated its position a while ago. Indeed, if Buffett’s conglomerate is hanging onto its position, shouldn’t other investors also be holding on or even buying more into weakness? That’s the big question. Jim Cramer May Not Like OXY, but There’s Value to Be Had Either way, Cramer has not been the biggest bull on oil and especially not Occidental, which he described as “not even a good one.” Though the price of admission into OXY shares screams of deep value, I’d have to agree with Cramer in that the name probably isn’t the best place to put new money into the markets. Of course, recent news surrounding Berkshire’s $9.7 billion has been making waves in shares of OXY. The stock fluctuated wildly, especially after it was revealed that the price Berkshire will pay was around $300 million, less than the original $10 billion that some expected, for the OxyChem assets. Either way, some Wall Street pros think the OxyChem sale is a plus for Occidental Petroleum. Given the market’s reaction in shares of OXY (the stock is up more than 24% since its year-to-date low in April), I’d argue it’s a great deal for Berkshire as well given it’s been a number of years since Berkshire made a splash this big. This Analyst Likes What the OxyChem Sale Means for Occidental Either way, it looks like Berkshire got a sweet deal for the assets, and OXY shareholders seem uncertain as to the path forward. Bank of Nova Scotia analyst Samantha Hoh upgraded OXY shares while hiking the price target by $7.00 to $55.00 per share. Why? Hoh believes that the move will help the firm chip away at its debt (of around $23.3 billion) and allow flexibility for share repurchases and dividend growth. I think Hoh is right on the money. Occidental is a cheap-looking stock, making it a great candidate to unlock value via share buybacks. Additionally, shareholders are sure to appreciate the greater financial flexibility and continued dividend hikes moving forward, especially as the stock continues to lose a bit of its lustre. Indeed, Occidental may not be the most efficient energy operator on the planet. But it has impressive assets and a valuation that looks severely depressed. In any case, the oil markets have been in a bit of a rut, and if prices sink below $60 per barrel, all energy plays across the board could face mounting pressures. The big question for buyers of Oxy at current levels is whether management can unlock enough operating efficiencies after the big OxyChem sale. Though I understand why Cramer isn’t in a rush to recommend the stock, I think OXY shares are worth hanging onto, especially while they’re down close to 40% from five-year highs. Occidental Certainly Looks Cheap So, should you go with Cramer’s advice or follow in the footsteps of Buffett’s Berkshire? At 16.1 times forward price-to-earnings, OXY still looks quite discounted, and with other billionaire legends buying up the stock in recent quarters, I certainly wouldn’t sleep on the name if you’re a fan of energy and seek a modest multiple. As is the case with most oil names, though, it could take a very long time and continued volatility before shares begin to show signs of paying off. Until then, the 2.2% dividend yield is worth collecting as management looks to pursue a buyback that I think has a high chance of paying off over the long term. Get Ready To Retire (Sponsored) Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. Here’s how it works: 1. Answer SmartAsset advisor match quiz 2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles. 3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future. The image featured for this article is © Public domain / Wikimedia Commons Latest Podcast Episode AI Companies Entering A Game of Chips More Wild Than Westeros 62 min Occidental Petroleum (OXY) is at a crossroads of investor sentiment, with Jim Cramer advising against the stock while Berkshire Hathaway maintains its position. The primary catalyst is the sale of OxyChem assets to Berkshire for $9.7 billion, a move that a Bank of Nova Scotia analyst believes will be pivotal for OXY's financial health. This transaction is expected to facilitate the reduction of a substantial debt load, which stands at approximately $23.3 billion, and create flexibility for enhanced capital returns through share repurchases and dividend growth. Despite Cramer's view that OXY is not a top-tier operator, the stock's valuation appears compelling at 16.1 times forward price-to-earnings with a 2.2% dividend yield. The stock has rallied 24% from its year-to-date low but remains nearly 40% below its five-year high, reflecting both recent optimism and long-term underperformance. The outlook is heavily contingent on management's ability to improve operating efficiencies post-sale and the trajectory of the oil market, where a drop below $60 per barrel is cited as a significant risk.

Key Decisions for Investors

• Investors with a long-term, value-oriented approach may consider OXY's valuation at 16.1x forward P/E attractive, banking on the thesis that the OxyChem asset sale will unlock value through debt reduction and future share buybacks.
• It is critical to monitor energy market dynamics, as a sustained fall in oil prices below the $60 per barrel threshold would likely pressure the company's cash flow and hinder its deleveraging and capital return strategy.
• Traders should anticipate continued volatility stemming from the conflicting opinions of high-profile investors, while long-term holders should focus on management's execution in reducing its $23.3 billion debt and initiating the anticipated shareholder return programs.