News

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.