Analyst William Janela of Mizuho Securities maintained a Buy rating on Murphy Oil (MUR – Research Report), retaining the price target of $55.00.
William Janela has given his Buy rating due to a combination of factors including Murphy Oil’s first-quarter earnings, which displayed a modest beat on earnings before interest, taxes, depreciation, and exploration costs (EBITDX), and aligned oil volumes with lower capital expenditures. This led to stronger free cash flow (FCF) for the quarter. Additionally, despite some Gulf of Mexico maintenance being deferred to the third quarter, Murphy Oil’s execution has provided the market with a clearer view of the potential for FCF expansion in the second half of 2024. This, combined with the anticipated progress towards “Murphy 3.0″—which includes reducing debt to less than $1 billion and shifting towards higher cash returns—supports the Buy rating and a price target of $55 based on net asset value (NAV).
Murphy Oil has also reiterated its commitment to its full-year 2024 guidance for production volumes and capital expenditure, indicating management’s confidence in the company’s operational outlook. Their projections are in line with expectations and even account for scheduled maintenance and downtime. Furthermore, Janela notes that Murphy Oil trades at an attractive valuation relative to its peers, with a free cash flow to enterprise value (FCF/EV) yield for 2024/2025 that is higher than that of its peers, and an enterprise value to EBITDX (EV/EBITDX) for the same years that indicates a relative discount. Such financial metrics, along with strategic operational plans, underpin Janela’s positive stance on Murphy Oil’s stock.
According to TipRanks, Janela is a 5-star analyst with an average return of 33.1% and a 62.77% success rate. Janela covers the Energy sector, focusing on stocks such as Murphy Oil, Civitas Resources, and SM Energy.
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Murphy Oil (MUR) Company Description:
Murphy Oil Corp. is a holding company, which engages in the exploration and production of oil and natural gas. It operates through the Exploration and Production and Corporate and Other segment. The Exploration and Production segment includes the United States, Canada, and all other countries. The Corporate and Other segment focuses on interest income, other gains and losses, interest expense, and unallocated overhead. The company was founded by Charles H. Murphy Jr. in 1950 and is headquartered in El Dorado, AR.
