NEW YORK (TheStreet) -- Shares of Marathon Oil (MRO) - Get Report are higher by 7.17% to $13.60 in mid-morning trading on Wednesday, as oil prices rally today, driving some energy and related stocks into the green.
Crude oil (WTI) is rising by 4.15% to $37.64 per barrel this morning and Brent crude is up by 3.02% to $37.20 per barrel, according to the CNBC.com index.
An unexpected decline in U.S. crude inventories helped oil rally today, however the commodity is still trading near multi-year lows as supply concerns and OPEC's lower demand outlook weigh, Reuters reports.
Crude inventories slipped by 3.6 million barrels last week, according to data released by the American Petroleum Institute on Tuesday.
The Organization of Petroleum Exporting Countries released a report Wednesday in which it said demand for its crude will be lower in 2020 than in 2016, Reuters noted. The expected slump in demand is due to OPEC rivals continuing to produce in the low price environment.
Marathon Oil is a Houston-based energy company that explores for, produces and markets crude oil and condensate, NGLs and natural gas in North America.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate MARATHON OIL CORP as a Sell with a ratings score of D+. This is driven by some concerns, 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 52.09%, 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 186.2% in earnings (-$1.22 versus $1.41).
- You can view the full analysis from the report here: MRO