Stock Upgrade: Murphy Oil's Production Estimates Higher Than Peers, According To Analyst

Truist Securities upgraded Murphy Oil Corporation MUR from Hold To Buy with a price target of $56, up from $49.
The analyst writes that Murphy is one of very few E&Ps it forecasts to have higher production and lower capital spending this year.
Truist forecasts Murphy Oil to generate nearly 90 mboepd of offshore production this year, driven by its legacy positions and recent development/tieback projects.
The company continues to run an active offshore exploration program with ~$100 million set aside this year for a few projects.
2023 FCF is expected to sequentially lower primarily due to weaker prices, which could rebound in 2024 to potentially higher than in 2021.
FCF yield of nearly 25% is anticipated this year, with the potential for even higher next year.
The analyst anticipates more steady results from MUR’s onshore production in 2023 versus 2022 and is most encouraged by Eagle Ford operations.
Data shows the most recent well performance is not only better than prior years but also higher than nearby operators on a per 1,000 ft. basis, such as Chesapeake Energy Corporation CHK, Trinity (Private), and Mesquite (Private) among others.
Price Action: MUR shares are up 2.60% at $39.72 on the last check Tuesday.

Analyst Calendar