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Can Murphy Oil (MUR) Continue to Surprise in Q3 Earnings?
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We expect Murphy Oil Corporation (MUR - Free Report) to beat expectations when it reports third-quarter 2016 results before the market opens on Oct 27. Last quarter, this oil and gas company reported a positive surprise of 12.20%. On an average, the company has recorded a positive earnings surprise of 23.62% over the four trailing quarters.
Why a Likely Positive Surprise?
Our proven model shows that Murphy Oil is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates and Murphy Oil has the right mix.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate of a loss of 19 cents and the Zacks Consensus Estimate of a loss of 22 cents, is pegged at +13.64%. This is a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Murphy Oil currently carries a Zacks Rank #3, which when combined with a positive ESP, makes us reasonably confident of a positive surprise this quarter.
Conversely, we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Murphy Oil expects third-quarter production levels in the range of 167,500 to 169,500 barrels of oil equivalent per day (BOE/d). This figure takes into account Murphy Oil’s joint ventures with Athabasca Oil Corporation, which provide the company access to Kaybob Duvernay and liquid-rich Placid Montney, as well as the divestiture of its interest in Syncrude.
The company is expected to benefit from its cost-saving initiatives in the third quarter. Moreover, Murphy Oil is streamlining its operations through a systematic non-core asset divestment strategy, which we believe, will boost its performance.
Other Stocks to Consider
Murphy Oil is not the only oil and gas company looking up this earnings season. We see likely earnings beats coming from these companies as well:
Concho Resources Inc. has an Earnings ESP of +10.53% and a Zacks Rank #2. The company is expected to release third-quarter 2016 results after the market closes on Nov 8.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank #2. The company is expected to release third-quarter 2016 results on Nov 1.
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Can Murphy Oil (MUR) Continue to Surprise in Q3 Earnings?
We expect Murphy Oil Corporation (MUR - Free Report) to beat expectations when it reports third-quarter 2016 results before the market opens on Oct 27. Last quarter, this oil and gas company reported a positive surprise of 12.20%. On an average, the company has recorded a positive earnings surprise of 23.62% over the four trailing quarters.
Why a Likely Positive Surprise?
Our proven model shows that Murphy Oil is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates and Murphy Oil has the right mix.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate of a loss of 19 cents and the Zacks Consensus Estimate of a loss of 22 cents, is pegged at +13.64%. This is a meaningful and leading indicator of a likely positive surprise.
Zacks Rank: Murphy Oil currently carries a Zacks Rank #3, which when combined with a positive ESP, makes us reasonably confident of a positive surprise this quarter.
Conversely, we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
MURPHY OIL Price and EPS Surprise
MURPHY OIL Price and EPS Surprise | MURPHY OIL Quote
Factors to Consider
Murphy Oil expects third-quarter production levels in the range of 167,500 to 169,500 barrels of oil equivalent per day (BOE/d). This figure takes into account Murphy Oil’s joint ventures with Athabasca Oil Corporation, which provide the company access to Kaybob Duvernay and liquid-rich Placid Montney, as well as the divestiture of its interest in Syncrude.
The company is expected to benefit from its cost-saving initiatives in the third quarter. Moreover, Murphy Oil is streamlining its operations through a systematic non-core asset divestment strategy, which we believe, will boost its performance.
Other Stocks to Consider
Murphy Oil is not the only oil and gas company looking up this earnings season. We see likely earnings beats coming from these companies as well:
Comstock Resources Inc. (CRK - Free Report) is expected to release third-quarter 2016 results on Nov 8, before the market opens. The company has an Earnings ESP of +11.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here
Concho Resources Inc. has an Earnings ESP of +10.53% and a Zacks Rank #2. The company is expected to release third-quarter 2016 results after the market closes on Nov 8.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank #2. The company is expected to release third-quarter 2016 results on Nov 1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>