UPDATE: Mizuho Securities Initiates Coverage On Marathon Oil

Mizuho Securities on Friday initiated coverage on Marathon Oil Corporation MRO with a Buy rating and price target of $40.

Analyst Jeffrey Connolly noted that "MRO is a pure-play E&P focused on the U.S. onshore with potential upside from international exploration efforts."

"While MRO trades in-line with peers on P/CF and EV/EBITDA metrics, delineation of the Austin Chalk, accelerating development in the Bakken, and de-risking the SCOOP and Stack plays will drive multiple expansion," according to Connolly.

As for the company’s assets, "North America generates the majority of MRO’s NAV with approximately 71 percent of proved reserves and the bulk of its resource potential. Africa holds nearly 28 percent of proved reserves with potential upside from exploration. Europe includes some production and reserves from the U.K. North Sea, but is not material after the Norway North Sea sale earlier this year," according to the report.

Connolly concluded that "delineation, de-risking, and acceleration of the U.S. onshore portfolio are catalysts for multiple expansion."

Marathon Oil Corporation recently traded at $34.50, down 0.6 percent.