Marathon Oil, an energy exploration and production company, is expected to report higher earnings and revenue in the fourth quarter, largely driven by surging energy prices and a recovery in demand.
The U.S. shale producer would report earnings per share of $0.52 per share, which represents year-over-year growth of over 530% from a loss of $0.12 per share seen in the same period a year ago. Marathon Oil would post revenue growth of over 86% to $1.55 billion from $830 million a year earlier.
“Marathon’s robust operational metrics suggest strong long-term cash flows that should support higher price points for the shares. The wells drilled by Marathon have extremely low oil price breakeven costs and need oil prices of just $35 a barrel to be profitable,” noted analysts at ZACKS Research.
Marathon Oil stock traded 2.31% lower to 20.72 in pre-market trading on Tuesday. The stock rose over 29% so far this year after surging a massive 146% in 2021.
Analyst Comments
“Rapid progress on debt reduction accelerates cash return. Having achieved its ’21 debt reduction target of $1.4 B and $4 B absolute debt, Marathon Oil (MRO) is well-positioned to return a minimum of 40% of CFO to shareholders beginning in 4Q21,” noted Devin McDermott, Equity Analyst And Commodities Strategist at Morgan Stanley.
“In-line valuation. MRO’s 2022 EV/EBITDAX and FCF yield are trading in line with peers.”
Marathon Oil Stock Price Forecast
Thirteen analysts who offered stock ratings for Marathon Oil in the last three months forecast the average price in 12 months of $21.77 with a high forecast of $26.00 and a low forecast of $19.00.
The average price target represents a 2.98% change from the last price of $21.14. Of those 13 analysts, seven rated “Buy”, five rated “Hold”, while one rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $20 with a high of $25 under a bull scenario and $10 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the oil company’s stock.
Several analysts have also updated their stock outlook. Susquehanna raised the stock price forecast to $22 from $18. Barclays lifted the target price to $20 from $18. Piper Sandler upped the price objective to $22 from $18.
Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator shows a strong buying opportunity.
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This article was originally posted on FX Empire
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