Marathon Oil Corp Stock Hold Recommendation Reiterated (MRO)

NEW YORK (TheStreet) -- Marathon Oil (NYSE:MRO) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:

• Despite its growing revenue, the company underperformed as compared with the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 1.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The gross profit margin for MARATHON OIL CORP is rather high; currently it is at 61.80%. It has increased significantly from the same period last year. Along with this, the net profit margin of 10.50% is above that of the industry average.
• MARATHON OIL CORP has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARATHON OIL CORP reported lower earnings of $2.41 versus $2.66 in the prior year. This year, the market expects an improvement in earnings ($2.64 versus $2.41).
• MRO has underperformed the S&P 500 Index, declining 11.65% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 60.5% when compared to the same quarter one year ago, falling from $996.00 million to $393.00 million.

Marathon Oil Corporation operates as an energy company worldwide. The company operates in three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. The company has a P/E ratio of 11.1, above the average energy industry P/E ratio of 11and below the S&P 500 P/E ratio of 17.7. Marathon Oil has a market cap of $19.44 billion and is part of the basic materials sector and energy industry. Shares are down 4.7% year to date as of the close of trading on Friday.

You can view the full Marathon Oil Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

 

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