Is Marathon Oil Stock A Buy As Oil Prices Drop?

Jul. 26, 2022 12:51 PM ETMarathon Oil Corporation (MRO)10 Comments


  • Marathon Oil is slated to report its Q2 earnings release on August 3, which we expect to be a solid report. However, the market still sent MRO tumbling in June.
  • We believe the market had anticipated demand destruction due to worsening macro headwinds that could cap further upside in oil prices. However, we believe MRO has formed a short-term bottom.
  • But we don't encourage investors to buy the dips yet. Instead, we urge investors to be patient and assess where the recovery could meet further selling pressure before failing.
  • Our valuation analysis suggests that MRO could underperform the market in the medium term. We believe it indicates why the market has demanded such high free cash flow yields.
  • As such, we rate MRO as a Hold for now. We encourage investors to bide their time.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Marathon Oil Corporation Gas Station and Trademark



Energy company stocks have been battered since staging their recent May/June highs after the surge in buying momentum following the Russia-Ukraine conflict. The market turned its focus from the geopolitical uncertainties toward worsening macro headwinds, as fears of demand destruction

Marathon Oil revenue by product

Marathon Oil revenue by product (Company filings)

Marathon Oil revenue change % and adjusted EBIT margins % consensus estimates

Marathon Oil revenue change % and adjusted EBIT margins % consensus estimates (S&P Cap IQ)

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

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