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Murphy Oil (MUR) to Gain on Cost Savings, High-Margin Assets

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Murphy Oil Corporation’s (MUR - Free Report) cost-saving efforts and low-cost asset development act as tailwinds. Also, steady growth-driving activities in the United States and at international locations are expected to boost its existing businesses.

We recently issued an updated research report on this currently Zacks Rank #3 (Hold) company, which has a trailing four-quarter earnings surprise of 19.43%, on average.

What’s Driving the Stock?

Murphy Oil possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies and the independent E&P group. The company is regularly pursuing developmental endeavors in the United States and at other global sites. It undertook cost-containment measures, which led to a 40% decline in 2020 G&A expenses from the 2019 baseline.

Over the past several months, the company has been trying to transform its portfolio through strategic moves like acquisitions, divestitures and oil-weighted discoveries. Its focus on developing high-margin liquid assets is evident from its production mix. The company is maintaining a multi-basin portfolio of onshore and offshore assets for additional risk-reduction amid fluctuating prices.

Woes

However, Murphy Oil operates in a highly competitive environment, which might dent its profitability. Also, stringent regulations and unfavorable foreign currency conversion rates are its near-term concerns.

Price Performance

Shares of Murphy Oil have rallied 11.1% in the past three months, underperforming the industry’s 25.6% growth.

Stocks to Consider

A few better-ranked stocks in the same sector are Devon Energy Corporation (DVN - Free Report) , EOG Resources, Inc. (EOG - Free Report) and Matador Resources Company (MTDR - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Devon Energy delivered an earnings surprise of 38.25%, on average, in the last four quarters. The company has a long-term (three-five years) earnings growth rate of 1.82%.

EOG Resources delivered an earnings surprise of 41.66%, on average, in the last four quarters. The company has a long-term earnings growth rate of 3.67%.

Matador Resources delivered an earnings surprise of 171.13%, on average, in the trailing four quarters. The Zacks Consensus Estimate for 2021 earnings has been revised 48.4% upward in the past 60 days.

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