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Murphy USA Inc. (MUSA) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Murphy USA (MUSA - Free Report) ? Shares have been on the move with the stock up 16.2% over the past month. The stock hit a new 52-week high of $269.7 in the previous session. Murphy USA has gained 33.9% since the start of the year compared to the 15.5% move for the Zacks Oils-Energy sector and the 19.3% return for the Zacks Oil and Gas - Refining and Marketing industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 3, 2022, Murphy USA reported EPS of $6.08 versus consensus estimate of $2.65 while it beat the consensus revenue estimate by 11.56%.
For the current fiscal year, Murphy USA is expected to post earnings of $17.54 per share on $22.52 billion in revenues. This represents a 17.56% change in EPS on a 29.69% change in revenues. For the next fiscal year, the company is expected to earn $13.33 per share on $22.82 billion in revenues. This represents a year-over-year change of -24% and 1.37%, respectively.
Valuation Metrics
Murphy USA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
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 USA 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 15.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 5.9X. On a trailing cash flow basis, the stock currently trades at 11.2X versus its peer group's average of 8.7X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Murphy USA currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 USA passes the test. Thus, it seems as though Murphy USA shares could have potential in the weeks and months to come.
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Murphy USA Inc. (MUSA) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Murphy USA (MUSA - Free Report) ? Shares have been on the move with the stock up 16.2% over the past month. The stock hit a new 52-week high of $269.7 in the previous session. Murphy USA has gained 33.9% since the start of the year compared to the 15.5% move for the Zacks Oils-Energy sector and the 19.3% return for the Zacks Oil and Gas - Refining and Marketing industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 3, 2022, Murphy USA reported EPS of $6.08 versus consensus estimate of $2.65 while it beat the consensus revenue estimate by 11.56%.
For the current fiscal year, Murphy USA is expected to post earnings of $17.54 per share on $22.52 billion in revenues. This represents a 17.56% change in EPS on a 29.69% change in revenues. For the next fiscal year, the company is expected to earn $13.33 per share on $22.82 billion in revenues. This represents a year-over-year change of -24% and 1.37%, respectively.
Valuation Metrics
Murphy USA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
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 USA 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 15.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 5.9X. On a trailing cash flow basis, the stock currently trades at 11.2X versus its peer group's average of 8.7X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Murphy USA currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 USA passes the test. Thus, it seems as though Murphy USA shares could have potential in the weeks and months to come.