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Marathon Oil Upgraded At Morgan Stanley To Overweight Amid 'Fastest Improving Unconventional Plays In The US'

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Marathon Oil Upgraded At Morgan Stanley To Overweight Amid 'Fastest Improving Unconventional Plays In The US'
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Marathon Oil Corporation (NYSE: MRO)'s recent STACK acquisitions add meaningful leverage to the “the fastest improving unconventional plays in the US, allowing for capital efficient growth into the next up-cycle,” according to Morgan Stanley’s Evan Calio.

Calio upgraded the rating on the company from Equal Weight to Overweight, while raising the price target from $18 to $21.

Catalysts

“We expect STACK will also provide material catalysts over the next 3+ quarters as it transitions from a delineation play to a development play,” the analyst mentioned.

Related Link: Marathon Oil Has Significant Upside: Citi Raises Target To $16

Calio believes the recent disruptions in crude supply have accelerated market re-balancing. Although there could be oil price risks in 2H16 due to the return of outage barrels, the analyst expects the “bridge to a materially high crude price on fundamentals” to be shorter now.

In addition, Calio pointed out that meaningful torque to commodity price recovery offers Marathon Oil the highest multiple compression among its Large Cap E&P peers into $80/bl in 2019, despite a production CAGR of 4 percent.

Latest Ratings for MRO

DateFirmActionFromTo
May 2017Bank of AmericaDowngradesBuyNeutral
Apr 2017Stifel NicolausInitiates Coverage OnHold
Mar 2017SusquehannaUpgradesNeutralPositive

View More Analyst Ratings for MRO
View the Latest Analyst Ratings

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