Marathon Oil (MRO) Stock Higher Today After Announcing 2015 Spending Cuts

NEW YORK (TheStreet) -- Shares of Marathon Oil Corp. (MRO) are up 2.74% to $27.40 after announcing 2015 spending cuts.

The Houston-based oil and gas company anticipates its 2015 capital, investment and exploration budget will be approximately $4.3 to 4.5 billion, or about 20% lower than 2014 levels, excluding its recently disposed Norway business.

Marathon expects production to rise in the high-single digits, excluding its Libya operations.

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Some traders bet a six-month price rout could be ending as more energy firms cut investment budgets, CNBC said.

Notably, Brent crude jumped 2.5% to trade above $62 a barrel in early morning trading on Thursday, giving a boost to the stock and the energy sector.

Brent futures for February delivery were up 0.59% to $61.54 at 10:16 a.m. in New York.

Separately, TheStreet Ratings team rates MARATHON OIL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate MARATHON OIL CORP (MRO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has slightly increased to $1,774.00 million or 7.84% when compared to the same quarter last year. In addition, MARATHON OIL CORP has also modestly surpassed the industry average cash flow growth rate of -1.58%.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that MRO's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
  • Looking at the price performance of MRO's shares over the past 12 months, there is not much good news to report: the stock is down 26.45%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. 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 decreased by 24.3% when compared to the same quarter one year ago, dropping from $569.00 million to $431.00 million.
  • You can view the full analysis from the report here: MRO Ratings Report

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