KeyBanc has revised its rating for Murphy Oil (MUR, Financial), moving it from Overweight to Sector Weight, indicating a more cautious stance on the energy company. The decision comes amidst concerns about current oil price dynamics, which the analyst believes are overly burdened with pessimistic assumptions regarding OPEC+ production growth, U.S. oil expansion, and potential global recession scenarios.
Murphy Oil is facing challenges, particularly due to its lack of oil price hedges and its constrained capacity to buy back shares this year, as outlined in its "Murphy 3.0 framework." This limitation is seen as a hindrance for the company to outperform its peers with a similar oil focus. Furthermore, following extensive marketing efforts in the spring, KeyBanc reports a tepid response from investors towards companies with an offshore oil focus, as clients are increasingly risk-averse.
In the face of these concerns, KeyBanc regards Murphy Oil as being at a disadvantage compared to other mid-cap companies in the oil sector, particularly those that do not share Murphy's offshore focus. As a result, the firm has adjusted its outlook to reflect these strategic and market challenges facing Murphy Oil.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for Murphy Oil Corp (MUR, Financial) is $31.00 with a high estimate of $45.00 and a low estimate of $22.00. The average target implies an upside of 45.06% from the current price of $21.37. More detailed estimate data can be found on the Murphy Oil Corp (MUR) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Murphy Oil Corp's (MUR, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Murphy Oil Corp (MUR, Financial) in one year is $33.89, suggesting a upside of 58.59% from the current price of $21.37. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Murphy Oil Corp (MUR) Summary page.
