Here's What Analysts Are Forecasting For Marathon Oil Corporation (NYSE:MRO) After Its Yearly Results
It's been a good week for Marathon Oil Corporation (NYSE:MRO) shareholders, because the company has just released its latest annual results, and the shares gained 3.2% to US$23.98. Results were roughly in line with estimates, with revenues of US$6.7b and statutory earnings per share of US$2.56. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Marathon Oil
Taking into account the latest results, Marathon Oil's 16 analysts currently expect revenues in 2024 to be US$6.64b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 4.6% to US$2.53 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.75b and earnings per share (EPS) of US$2.92 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at US$31.01, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Marathon Oil, with the most bullish analyst valuing it at US$39.00 and the most bearish at US$24.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 0.9% annualised decline to the end of 2024. That is a notable change from historical growth of 8.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.3% annually for the foreseeable future. It's pretty clear that Marathon Oil's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Marathon Oil's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$31.01, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Marathon Oil going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Marathon Oil has 4 warning signs (and 1 which is a bit unpleasant) we think you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
