These 3 Beaten-Down Energy Stocks Could Have Further to Fall

Three energy stocks, Oneok, Occidental Petroleum, and Williams Companies, face distinct downside risks despite broader trends in natural gas prices. Oneok's recent 49% EPS beat does not fully alleviate execution concerns regarding its M&A strategy. Occidental Petroleum's $9.7 billion all-cash sale of OxyChem to Berkshire Hathaway is viewed negatively by the market due to tax inefficiencies and environmental liabilities, potentially driving further share price declines. Meanwhile, Williams Companies' rich valuation at 27x forward earnings and lower dividend yield relative to peers could continue to pressure its stock performance.

Analysis

The energy sector, despite broader commodity price turbulence, presents specific downside risks for Oneok (OKE), Occidental Petroleum (OXY), and Williams Companies (WMB), reflected in a "strongly negative" overall sentiment. These companies face individual challenges that could lead to further share price declines, warranting careful investor consideration.

Oneok's Q3 2025 earnings reported a 49% year-over-year EPS increase to $1.49, suggesting prior M&A deals are beginning to pay off, yet execution risk from these acquisitions persists, with shares down 30% year-to-date. Occidental Petroleum's $9.7 billion all-cash sale of OxyChem to Berkshire Hathaway is viewed negatively by the market due to tax inefficiencies, $1 billion in environmental liabilities, and a sale price below sell-side analyst estimates, potentially driving further share price declines.

Williams Companies trades at a rich valuation of 27x forward earnings, significantly above peers like Enbridge (21x) and Kinder Morgan (20x). Its 3.5% forward dividend yield also lags competitors (Enbridge 5.7%, Kinder Morgan 4.5%), contributing to a 10% share price drop over the last month. These valuation disparities suggest continued pressure on WMB's stock performance.

Key Decisions for Investors

• Consider reducing or avoiding exposure to Occidental Petroleum (OXY) given the negative market digestion of its recent asset sale and associated liabilities
• Monitor Oneok (OKE) for sustained EPS growth in upcoming quarters to confirm the long-term success of its M&A strategy
• Evaluate Williams Companies (WMB) against peers, as its rich valuation and lower dividend yield suggest better relative value in Enbridge (ENB) or Kinder Morgan (KMI)