Murphy Oil’s stock price action
Falling crude oil (USO) (UCO) and natural gas (BOIL) (UGAZ) prices over the last two years have led to a falling trend in the entire upstream sector. Since January 2016, as seen in the below chart, Murphy Oil’s (MUR) stock price is in a new uptrend where it is making a pattern of higher highs and higher lows.
Murphy Oil’s stock price performance leading into 1Q16 earnings
Recently, Murphy Oil (MUR) has shown excellent relative strength when compared with other crude oil (OIL) and natural gas (UNG) producers. In the last three months, Murphy Oil’s stock price has increased by ~128%. Compare this with the SPDR S&P Oil and Gas Exploration & Production ETF (XOP), which is up by ~45% during the same period. XOP invests at least 80% of its total assets in oil and gas exploration companies, whereas the Vanguard Energy ETF (VDE) invests into the broader energy market.
Even for 2016, MUR is outperforming other upstream companies. For 2016, MUR is up by ~61%, whereas other oil and gas producers like Occidental Petroleum (OXY), Exco Resources (XCO), and EP Energy (EPE) are up by ~14%, ~19%, and ~20% respectively.
Murphy Oil’s stock price movement after past earnings
MUR reported its 4Q15 earnings, after the market close on January 27, 2016. In 4Q15, excluding the one-time items, MUR reported a loss of $0.76 per share, $0.55 better than consensus for its loss of $1.31 per share. Following the earnings release, better-than-expected earnings saw Murphy Oil’s stock price increase by ~8% in the two sessions.
In 3Q15 earnings, MUR reported a loss of $0.72 per share, $0.20 better than consensus for a loss of $0.92 per share. Following the earnings release, better-than-expected earnings saw MUR’s stock price increase by ~15% in just six sessions.
A similar upward reaction was observed after the 4Q14 earnings when MUR’s stock price increased by ~19% in just 11 sessions after beating the consensus earnings estimates by $0.10 per share.