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What Analysts Are Saying about Marathon Oil’s PayRock Acquisition

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Wall Street analyst ratings for Marathon Oil

Currently, ~54% of Wall Street analysts rate Marathon Oil (MRO) a “buy,” and ~39% rate it a “hold.” About 7% rate the stock a “sell.” The median price target from these recommendations is $16.69, which is ~11% higher than MRO’s June 21, 2016, closing price of $15.09.

Let’s look now at analysts’ median price target recommendations for other upstream companies. Analysts say Pioneer Natural Resources (PXD), EOG Resources (EOG), and SM Energy (SM) have potential upsides of ~20%, ~4%, and ~13%, respectively, from their June 21, 2016, closing prices.

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The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies. The Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x ETF (DRIP) is a leveraged inverse ETF that invests in oil and gas exploration and production companies.

Individual recommendations for Marathon Oil

The above table shows Wall Street analyst forecasts for Marathon Oil following its PayRock acquisition announcement. As you can see, Credit Suisse rates MRO “outperform” with a target price of $18.50. That’s ~23% higher than the June 21, 2016, closing price of $15.09. Credit Suisse expects MRO to reach the target price within 12 months of the date of recommendation.

The highest target price for Marathon Oil

The highest target price for Marathon Oil comes from Morgan Stanley. It assigned Marathon Oil a target price of $21, which is ~39% higher than the June 21 closing price of $15.09. Morgan Stanley issued its recommendation on June 20, 2016, and is expecting MRO to hit the target price within 12 months of the recommendation.

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