On Thursday, JPMorgan adjusted its target on Murphy Oil Corp . (NYSE: MUR) shares, increasing to $52 from the previous $51, while maintaining an Overweight rating on the stock.
The firm expects a solid operational quarter for Murphy Oil, highlighting the strong performance at the Terranova asset and the successful completion of planned workover projects in the Gulf of Mexico (GoM).
Murphy Oil has expressed confidence in the current production levels at the Terranova asset, with wells performing better than expected. The company is also progressing according to its onshore development schedule for the second quarter of 2024, with multiple wells planned across the Tupper Montney, Kaybob Duvernay, and Eagle Ford (NYSE:F) regions.
The company's second-quarter volumes are anticipated to gain from the completion of the Marmalard and Mormont workover projects in the GoM, which are expected to contribute 6.5 thousand barrels of oil equivalent per day (MBoe/d) of net production. Additionally, Murphy Oil is on track to bring the Neidermeyer #1 well back online in the second quarter, with a rig currently on location and an expected net production of 4 MBoe/d.
Despite forecasting a slight miss on EBITDAX for the first quarter, compared to the Street's estimate of $407 million, JPMorgan predicts Murphy Oil will post an EBITDAX of $400 million. The firm also sets the first-quarter earnings per share (EPS) and cash flow per share (CFPS) estimates at $0.80 and $2.35, respectively, which is below the consensus estimates of $0.91 and $2.58.
These estimates are based on first-quarter oil volumes of 88.7 MBoe/d and total volumes of 168 MBoe/d, slightly above the company's guidance, at a capital expenditure of $283 million.
Looking ahead, Murphy Oil plans to drill two exploration wells in Vietnam in the second half of 2024 and is expected to spud two non-operated exploration wells in the second quarter of the year.
InvestingPro Insights
As Murphy Oil Corporation (NYSE: NYSE:MUR) continues to make strides in its operations, the latest data from InvestingPro provides a deeper financial perspective. With a market capitalization of $7.38 billion and a P/E ratio of 11.16, the company presents itself as a potentially attractive investment based on earnings. The stock's price stability is reflected in its low price volatility, which can be appealing to investors looking for steady performers in the energy sector. Notably, Murphy Oil has a commendable track record of maintaining dividend payments for over half a century, currently yielding 2.48%, which could catch the eye of income-focused investors.
InvestingPro Tips highlight that the stock is trading near its 52-week high, indicating strong market confidence, and has shown impressive returns over the last month and three months. Analysts are optimistic about the company's profitability for the year, a sentiment supported by its profitable performance over the last twelve months. For those considering a deeper analysis, InvestingPro offers additional insights, including 11 more tips, that could help in making a more informed investment decision. Prospective subscribers can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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