Profile and Estimates
Marathon Oil has a market cap of $23.74 billion and currently trades for $33.53 per share. Shares are up 13.66% YTD and trade 47.13% above their 52-week low of $22.79. Analysts have a mean target price of $40.63 and a median price target of $40.00 on the shares. Twenty two analysts have an average first quarter earnings per share estimate of $0.72 on estimated revenues of $4.25 billion. Marathon Oil has only beat earnings expectations in one of last four quarters.
Fundamentals and Highlights (Sources cited below article)
- 2.00% dividend yield.
- P/B of 1.3 which is below the industry averages ratio of 1.5.
- Operating margins of 39.0% and net margins of 9.8% are both above the industry averages 14.4% and 8.1% respectively.
- Slowly acquiring land in highly profitable areas like Eagle Ford and Bakken, currently owns over a quarter of a million acres in Eagle Ford and over 400,000 acres in the Bakken.
- P/E of 15.0 and P/S of 1.5 are both above the industry averages 10.7 and 0.6 respectively.
- ROA of 4.8 and ROE of 8.9 are both below the industry averages 8.9 and 19.2 respectively.
- Late entry into Bakken and Eagle Ford came at a lofty price.
- High tax rate. Was 74.12% last year which was much higher than competitors Anadarko (31.42%), EOG (55.47%) and Apache (58.97%).
It's hard to get past that extremely high tax rate but Marathon is targeting more profitable areas and has debt under control. Short interest is down from year-end highs and investors/analysts are expecting a lower EPS than the same time last year, which should make the targeted $0.72 per share relatively easy to achieve. Keep an eye out for the earnings report on Tuesday.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.