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Marathon Oil (MRO) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3-min read

Marathon Oil (MRO) closed the most recent trading day at $18.24, moving +1.16% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.41%. At the same time, the Dow lost 0.01%, and the tech-heavy Nasdaq gained 0.13%.

Heading into today, shares of the energy company had gained 12.41% over the past month, outpacing the Oils-Energy sector's gain of 4.81% and the S&P 500's gain of 2.36% in that time.

Marathon Oil will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.54, up 550% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.59 billion, up 91.6% from the year-ago period.

Any recent changes to analyst estimates for Marathon Oil should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Marathon Oil is currently a Zacks Rank #3 (Hold).

Investors should also note Marathon Oil's current valuation metrics, including its Forward P/E ratio of 7.96. This represents a discount compared to its industry's average Forward P/E of 12.16.

It is also worth noting that MRO currently has a PEG ratio of 0.53. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Oil and Gas - Integrated - United States stocks are, on average, holding a PEG ratio of 0.53 based on yesterday's closing prices.

The Oil and Gas - Integrated - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 226, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MRO in the coming trading sessions, be sure to utilize Zacks.com.


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