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Murphy Oil (MUR) Hit Fresh Highs: Is There Still Room to Run?
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Have you been paying attention to shares of Murphy Oil (MUR - Free Report) ? Shares have been on the move, with the stock up 10.9% over the past month. MUR hit a new 52-week-high of $35.43 in the previous session. Murphy Oil has gained 13% since the start of the year compared to the 4.3% move for the Oils-Energy sector and the 4.7% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus EPS estimate in each of the last four quarters. In its last earnings report on May 2, 2018, Murphy Oil reported EPS of $0.23 vs. the Zacks Consensus of $0.22 while it beat the consensus revenue estimate by 2.79%.
For the current fiscal year, Murphy Oil is expected to post earnings of $1.53 per share on $2.4 billion in revenues. This represents a 1276.92% change in EPS on a 10.12% change in revenues. For the next fiscal year, the company is expected to earn $1.58 per share on $2.5 billion in revenues. This represents a year-over-year change of 3.53% and 4.31%, respectively.
Valuation Metrics
Murphy Oil may be at a 52-week-high right now, but what might the future hold for MUR? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Murphy Oil has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM score of A.
In terms of its value breakdown, the stock currently trades at 22.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.1X versus its peer group's average of 7.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Murphy Oil currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Murphy Oil fits the bill. Thus, it seems as though MUR shares could have potential in the weeks and months to come.
How Does Murphy Oil Stack Up to the Competition?
Shares of Murphy Oil have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Cheniere Energy (LNG - Free Report) , Continental Resources , and Anadarko Petroleum , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Oil and Gas--Exploration and Production industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MUR, even beyond its own solid fundamental situation.
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Murphy Oil (MUR) Hit Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Murphy Oil (MUR - Free Report) ? Shares have been on the move, with the stock up 10.9% over the past month. MUR hit a new 52-week-high of $35.43 in the previous session. Murphy Oil has gained 13% since the start of the year compared to the 4.3% move for the Oils-Energy sector and the 4.7% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus EPS estimate in each of the last four quarters. In its last earnings report on May 2, 2018, Murphy Oil reported EPS of $0.23 vs. the Zacks Consensus of $0.22 while it beat the consensus revenue estimate by 2.79%.
For the current fiscal year, Murphy Oil is expected to post earnings of $1.53 per share on $2.4 billion in revenues. This represents a 1276.92% change in EPS on a 10.12% change in revenues. For the next fiscal year, the company is expected to earn $1.58 per share on $2.5 billion in revenues. This represents a year-over-year change of 3.53% and 4.31%, respectively.
Valuation Metrics
Murphy Oil may be at a 52-week-high right now, but what might the future hold for MUR? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Murphy Oil has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM score of A.
In terms of its value breakdown, the stock currently trades at 22.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 6.1X versus its peer group's average of 7.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Murphy Oil currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Murphy Oil fits the bill. Thus, it seems as though MUR shares could have potential in the weeks and months to come.
How Does Murphy Oil Stack Up to the Competition?
Shares of Murphy Oil have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Cheniere Energy (LNG - Free Report) , Continental Resources , and Anadarko Petroleum , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Oil and Gas--Exploration and Production industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MUR, even beyond its own solid fundamental situation.