Opinions
Jim Cramer - Mad Money
Marathon Oil
MRO-N
DON'T BUY
Apr 03, 2023
$26.330
Stock price when the opinion was issued
integrated oils
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WEAK BUY
It's okay. It got an upgrade today and shares will probably go higher. He prefers Chevron, though.
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BUY
Among the 10 top performers on the S&P of 2021 #2, up 146%. Its success snuck up on him. But MRO does have capital discipline, which it didn't have before. It paid down debt and raised its dividend for the third straight quarter ever, but didn't increase its drilling budget. This despite strong cash flow and earmarked $2.5 billion share buybacks going forward. This could be a repeat winner in 2022.
integrated oils
BUY
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Trades at a low PE, but is a value trap and is highly cyclical. Their EPS leapt from $3.79 in 20167 to -$1.52 in 2020 to $26.63 last year! Up, down and up big. It's almost impossible to repeat 2022 numbers. Marathon has had a big share buyback. The dividend did grow a little. Today, shares are hitting 5-year highs. However, future 2025 EPS estimates are sliding to less than half of 2022's peaks, because of less demand for oil and gas. Also, the existential long-term obstacle are EV's. Consider the massive clean-energy incentives in Biden's 2022 IRA. It's possible earnings have already peaked--big warning.