Back to top

Analyst Blog

We have maintained our Neutral recommendation on Murphy Oil Corporation (MUR - Analyst Report). The company currently has a Zacks Rank #3 (Hold).

Why the Reiteration?

In the fourth quarter and full year of 2012, Murphy Oil’s earnings per share and revenues surpassed the Zacks Consensus Estimates. The outperformance was primarily attributable to significant improvement in the Exploration and Production, and Refining and Marketing segments, higher crude oil sales volume and a decline in exploration expenses.

Murphy Oil plans to sell its UK upstream businesses and spin-off its U.S. downstream subsidiary, Murphy Oil USA, Inc. to an independent entity. The divestiture will let the company to have a deeper focus on its existing assets and add new ones to drive further value, and the spin-off will enable both the companies to assign resources and redeploy existing capital as per their own market conditions and priorities.

In addition, we believe that Murphy Oil’s significant progress in offshore drilling activities in the Eagle Ford Shale and the signing of a new agreement with Wal-Mart Stores Inc. (WMT - Analyst Report) for new store additions will act as a positive catalyst for its future growth.

However, uncertainty associated with drilling results and volatile oil prices could challenge the company’s forthcoming financial results.

The current Zacks Consensus Estimate for first-quarter 2013 of 90 cents is at the upper end of the company’s earnings guidance of 55 cents to 90 cents. This earnings projection takes into account the loss of approximately $10 million from downstream operations and total exploration expense of $70–$140 million.

Other Stocks to Consider

Other stocks in the sector that are presently doing favorable business include PostRock Energy Corporation and Range Resources Corporation (RRC - Analyst Report). Both stocks carry a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%