Shares of Marathon Oil (MRO) - Get Report  rose 2.15% in early morning trading Tuesday to $14.23 as the KLR Group initiated coverage of the stock with a buy rating.

The investment bank has a $21 price target for the shares of the Houston-based company, which it says has substantial intrinsic value.

"Our bear case commodity forecast suggests Marathon should remain around $14 per share, while our bull case implies around 108% upside to $29 per share," the firm wrote in a report.

Research chief John Gerdes said Marathon trades at a 20% discount to the peers on a 2017 enterprise value-to-Ebitda basis although noted it has 5% less expected production growth per year than its peers.

The company, which is led by 24-year Exxon Mobil (XOM) - Get Report veteran Lee Tillman [pictured], has its primary operations in south Texas' Eagle Ford shale, where it has a five-rig rig program and plans to drill 150 to 160 wells this year in the oilier part of the play, KLR said. Its emerging development is in the Scoop/Stack area of Oklahoma, where it has two rigs and plans to drill 65 to 75 wells this year. It also owns properties in the Williston Basin in North Dakota, where it's conducting intermittent drilling.

Marathon also has assets outside the U.S. It owns a 20% non-operated interest in the Athabasca oil sands project in Alberta, Canada, and in Equatorial Guinea it holds 60% of a natural gas liquefaction facility and 45% of a methanol plant, which allow the company to monetize its natural gas reserves in the Alba field. Gerdes estimates the Athabasca oil sands stake constitutes around $4 per share of embedded value and the Equatorial Guinea stakes represent around $1 per share of intrinsic value.

Marathon also has properties in Iraq's Kurdistan region, including a 15% working interest in the Atrush block and 20% working interest in the Sarsang block. The company expects the wells in the Atrush area to begin producing late this year, KLR said.

In April Marathon announced it had agreed to sell non-core assets, primarily in Wyoming's Big Horn area, for $950 million, bringing its divestitures to $1.3 billion and surpassing its target of $750 million to $1 billion. Some analysts think it could use part of the proceeds to pick up properties that Gastar Exploration (GST) is shedding in the Stack area.