Due to political tensions in the Middle East, oil prices are on track for the biggest one-day gain in three weeks, Marketwatch reports. Earlier today, Turkey said it shot down a Russian fighter jet near the Turkey-Syrian border.
"The Mideast is slowly or quickly grinding towards an event which hits the energy system over there," Richard Hastings, macro strategist at Seaport Global Securities, told Marketwatch. "That would occur because oil is still the dominant economic engine for so many participants. It's strategically the first and biggest risk factor."
Crude oil (WTI) is up 2.54% to $42.81 per barrel and Brent oil is rising 2.52% to $45.96 per barrel, according to the CNBC.com index.
Based in Houston, Marathon Oil is an E&P company that operates in North America, Europe and Africa.
Separately, TheStreet Ratings team rates MARATHON OIL CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate MARATHON OIL CORP (MRO) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 273.8% when compared to the same quarter one year ago, falling from $431.00 million to -$749.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MARATHON OIL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $496.00 million or 72.04% 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 46.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 346.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- MARATHON OIL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MARATHON OIL CORP increased its bottom line by earning $1.41 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 186.9% in earnings (-$1.23 versus $1.41).
- You can view the full analysis from the report here: MRO
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.