ConocoPhillips Vs. Occidental: Both Ride The Oil Wave, Only One Is Shaping The Tide

JPMorgan's Arun Jayaram isn't sitting on the fence regarding oil giants jockeying for investor attention. He's got a clear favorite, and it's not Occidental Petroleum Corp OXY.

Jayaram remains bullish on ConocoPhillips COP, rating it Overweight with a $113 price target. This implies a 31% upside from its April 11 close of $86.39.

He's sticking with a Neutral rating on Occidental Petroleum, despite a $52 target that still suggests a 38% upside from its $37.67 mark. But make no mistake — this isn't a tie.

See Also: Occidental Reports Higher Q1 Prices As Tariff Tensions Shake Oil Market

ConocoPhillips: The Strategist's Pick

Since its 2016 strategy overhaul, ConocoPhillips has been a poster child for disciplined portfolio management. Jayaram credits the company's counter-cyclical dealmaking for sharpening its cost structure and boosting inventory resilience, especially in the Lower 48.

He also highlights its exposure to LNG and ability to keep capital costs in check — traits that help it stand out in a sector known for overspending.

Even though the Marathon Oil (MRO) merger has drawn some skepticism from investors worried about inventory dilution, Jayaram argues ConocoPhillips's long-cycle investments and $6 billion buyback plan in 2025 keep it in elite company.

He sees ConocoPhillips as a core E&P holding with a cash-return mindset that rivals should envy.

Occidental Petroleum: Debt-Heavy and Waiting on the Payoff

Occidental Petroleum, on the other hand, still feels the weight of its past. While the company has made strides in deleveraging after the Anadarko acquisition, Jayaram is cautious on its next act: digesting the $12 billion CrownRock deal, which leaned heavily on debt. With share buybacks shelved and asset sales not yet factored into JPMorgan's model, Jayaram doesn't see Occidental hitting its debt-reduction target until 2027.

While there's an upside to the stock — more than 38% if it reaches Jayaram's $52 target — the risk-reward skew isn't as attractive when compared to ConocoPhillips. He flags Occidental's above-average leverage and subpar capital returns versus peers at current strip pricing as reasons to stay neutral.

The Verdict

If this were a heavyweight bout, Jayaram has ConocoPhillips winning by unanimous decision. While both stocks offer meaningful upside, ConocoPhillips’s lower capital requirements, superior cash return plan, and savvy portfolio management give it the edge in JPMorgan's playbook.

As Jayaram puts it, ConocoPhillips's not just riding the oil wave – it's shaping the tide. Occidental, meanwhile, is still working through the swells.

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