Editor's Note: 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.
NEW YORK (
-- Marathon Oil
) 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, solid stock price performance and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.
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Highlights from the ratings report include:
- MRO's revenue growth has slightly outpaced the industry average of 6.4%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 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 ($2.67 versus $2.41).
- 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.
- Net operating cash flow has significantly decreased to $769.00 million or 57.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Marathon Oil Corporation operates as an energy company worldwide. The company operates in three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. Marathon Oil has a market cap of $21.09 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 12.1, below the S&P 500 P/E ratio of 17.7. Shares are up 2.2% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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