Yahoo Finance Murphy Oil Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Murphy Oil Corporation (NYSE:MUR) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were US$803m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.83 were also better than expected, beating analyst predictions by 15%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Murphy Oil
Following the recent earnings report, the consensus from twelve analysts covering Murphy Oil is for revenues of US$3.25b in 2024. This implies a measurable 4.2% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 8.3% to US$3.62 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.33b and earnings per share (EPS) of US$3.65 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The consensus has reconfirmed its price target of US$51.53, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Murphy Oil's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Murphy Oil, with the most bullish analyst valuing it at US$67.00 and the most bearish at US$44.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 8.3% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.8% annually for the foreseeable future. It's pretty clear that Murphy Oil's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$51.53, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Murphy Oil. Long-term earnings power is much more important than next year's profits. We have forecasts for Murphy Oil going out to 2026, and you can see them free on our platform here.
Even so, be aware that Murphy Oil is showing 2 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
