Image Source: Pexels

 Summary

  • Latest US Consumer Price Index data reveals that inflation is easing, leading to an increase in the energy sector.
  • Marathon Oil has a mean recommendation rating of 2.2 and has a consensus mean price target of US$32.23.
  • On July 12, 2023, Marathon Oil stock price rose by 1.89% and the S&P 500 energy sector index rose by 1.1%.

The US Bureau of Labor Statistics released the Consumer Price Index data for June 2023, which indicated that inflation is easing. CPI rose 3% over the last year, which was the smallest increase in inflation since March 2021.

A slowdown in inflation has resulted in buying in energy stocks, with the S&P 500 energy subindex rising by 1.1% on July 12, 2023. Like other energy sector players, Marathon Oil (NYSE: MRO) stock also saw price increase of 1.89% on July 12, 2023.

The stock has a mean recommendation rating of 2.2 on a scale of one to five. Here, one represents a ‘strong buy’ rating and five represents a ‘strong sell’ rating. Meanwhile, the stock has a consensus mean price target of US$32.23, an upside potential of 30% over Wednesday’s closing price.

MRO Price Chart; Image Source: MRO EODHD/Others

MRO closed at US$24.79 on Wednesday, July 13, 2023. The stock hit its 52-week high of US$ 33.42 on November 7, 2022.

Q1 2023 revenue dips as compared to Q1 2022

Marathon Oil reported a revenue of US$ 1.680 billion in the March 2023 quarter, as against US$ 1.76 billion in March 2022 quarter. The net income for the March 2023 quarter was US$ 417 million or US$0.66 per diluted share.

The net operating cash flow was US$865 million and free cash flow was US$ 333 million for the three months ended March 31, 2023. In its earnings release, Marathon Oil reported that it remains on track to fulfil its production guidance for full year 2023.

The company also announced a dividend of 10 cents per share payable on June 17, 2023.

Analysts upgrade Marathon Oil to ‘buy’ rating

On July 12, 2023, one equity analyst upgraded Marathon Oil to a ‘buy’ rating and another analyst upgraded it to ‘outperform’ rating, as per data available on EODHD/Others.

Alongside this, Siebert Williams Shank upgraded Marathon Oil to ‘buy’ rating on July 3, 2023 with  a price target of US$38 on the stock. Susquehanna Financial Group also upgraded MRO to a ‘positive’ rating on July 10, 2023, with a price target of US$32.

Piper Sandler upgraded MRO to an ‘overweight’ rating on July 10, 2023, and maintained a price target of US$32. Meanwhile, Evercore ISI maintained an ‘outperform’ rating after reviewing the stock on July 10, 2023.

Data on EODHD/Others suggests that of the 26 analysts covering the stock, five have given it a ‘strong buy’ rating, thirteen have given it a ‘buy’ rating, seven have given it a ‘hold’ rating. At the same time, one analyst believes the stock is a ‘sell’ and none of the analysts have given it a ‘strong sell’ rating.