OXY agreed to buy Phibro LLC (oil & gas trading unit) from
Citibank (C 5****) for about $250MM. While compensation issues
remain, we view the deal as fairly valued and Phibro had
consistent profits the past 5 years. OXY is set to post Q3
results on 10/22. With an oil focus and no refining unit, we
expect OXY to benefit from higher forecast oil prices. We raise
our '09 operating EPS est. by $0.31 to $3.39, '10s by $0.07 to
$5.65, and '11s by $0.30 to $7.48. Blending our DCF with widened
relative valuations, we up our 12-month target by $10 to $90.
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