Friday, September 13, 2019
1. OXY’s free cash flow yield
- Morgan Stanley singled out Occidental Petroleum (NYSE: OXY) as a free cash flow growth story going forward, after assessing the company’s acquisition of Anadarko Petroleum.
- “Just one month after closing the acquisition of APC, planned integration, debt reduction via asset sales, and execution on synergies are all on track” Morgan Stanley said in a note.
- “Successful execution could underpin one of the more differentiated rates of change and free cash flow growth stories among large cap E&Ps and global majors,” the bank added.
- Occidental offers a “best in class 7% yield,” which could double to 14% by 2022, which could leave “ample room for incremental return of cash via dividend growth and buybacks,” Morgan Stanley said.
- The bank reiterated an equal-weight rating for now, but pointed out the positive upside.
2. Corn prices crashed over past month
- The U.S. and China have made some significant moves to tamp down tension regarding the trade war. China delayed some tariffs, and Trump responded with a two-week delay.
- Corn prices have crashed over the past month, after the last data release from the U.S. Department of Agriculture, which revealed more supply than expected.
- “The favourable growing conditions in recent weeks have helped corn plants develop, prompting many…
