Marathon Oil Q4 Results Above Estimates (MRO)

Oppenheimer is out with a report today which reveals that Marathon Oil's MRO Q4 earnings are above prior estimates. MRO's adjusted income is $780 million, or $1.09 per share, which is $0.12 above the estimate. According to the report, Q4 earnings benefited from higher oil and gas realizations in addition to improved R&M results. The Oppenheimer report states that MRO stock has gained 26% so far this year, which is well above the 11% of its competitors and 4% of the S&P 500. Capital spending this year is estimated to be $5.3 billion (9% above 2010), of which 80% goes to oil projects. Oppenheimer analysts believe MRO's upside potential is greater that its downside risk from lower oil and natural gas prices, and that low valuation and high financial flexibility and dividend yield make MRO shares attractive. Key price target risks given by the report include: low oil prices, poor exploration results, and declining production and oil reserves. Oppenheimer analysts give MRO a price target of $52. It is trading at $46.55.