Marathon Oil Corporation (MRO), headquartered in Houston, Texas, is an independent company that explores, produces, and markets crude oil, natural gas liquids, and natural gas domestically and internationally. With a market cap of $15.15 billion, MRO’s innovative approaches and commitment to sustainability have significantly impacted the energy sector, transforming how resources are harnessed and utilized worldwide.
MRO stock has underperformed the broader market over the past year. The stock has gained 4.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 16.4%. However, in 2024, the stock has gained 12.1%, outperforming SPX’s 9.8% returns on a YTD basis.
Narrowing the focus, MRO’s outperformance is also evident compared to the S&P Oil & Gas Exploration & Production ETF (XOP). The exchange-traded fund has declined 8.2% over the past year. Also, the stock's YTD gains outshine the ETF’s 1.9% returns over the same time frame.
Marathon Oil reported Q2 earnings on Aug. 7. The stock gained marginally on the day it released earnings. The company reported net revenues of $1.71 billion, an increase from $1.51 billion in the same quarter last year. Net income applicable to MRO rose to $349 million, or $0.63 per diluted share, compared to $287 million, or $0.48 per diluted share in the year-ago quarter.
On Jul.9, Marathon Oil fell more than 1% as WTI crude prices hit a one-week low, putting pressure on energy producers and service providers.
For the current fiscal year, ending in December, analysts expect MRO’s EPS to grow 6.9% to $2.79 on a diluted basis. The company's earnings have been impressive. It beat the consensus estimate in each of the last four quarters.
Among the 20 analysts covering MRO stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” and 10 “Holds.”
This configuration is less bullish than three months ago when the consensus rating was “Strong Buy.”
On Jul. 22, J.P. Morgan analyst Arun Jayaram downgraded MRO’s rating to a ”Hold” and set a price target of $33, implying a potential upside of 21.6% from current levels.
The mean price target of $33.11 represents a 22% premium to MRO’s current price levels. The Street-high price target of $42 suggests an upside potential of 54.8%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
