- Raymond James analyst John Freeman reiterated a Strong Buy rating on the shares of Marathon Oil Corp MRO and raised the price target from $37 to $48.
- The analyst said Q3 earnings were strong for Marathon, with production out of Delaware exceeding expectations.
- Buybacks impressed to the upside as the company paid out ~80% of operational cash flow for the quarter, he added.
- The only miss was on capex, Marathon had to raise their guidance from $1.3 billion to $1.4 billion for the year.
- Freeman believes Marathon remains in an excellent position to be a leader in shareholder returns, with his updated model projecting a 13% yield on buybacks and a 15% total yield when accounting for the base dividend.
- The analyst said the company has a strong balance sheet and top-tier return strategy.
- He thinks Marathon represented one of the few companies in his coverage with steady and rising per-share metrics, thanks to their incredibly aggressive buyback program.
- Freeman specified that the company would build cash next year for debt reduction, further buybacks, and/or additional acquisitions.
- Price Action: MRO shares are trading lower by 1.42% at $29.96 on the last check Monday.
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