JPMorgan Downgrades Murphy Oil Corp. (MUR) to Neutral

JPMorgan analyst Arun Jayaram downgraded Murphy Oil Corp. (NYSE: MUR) from Overweight to Neutral with a price target of $47.00 (from $50.00).

The analyst comments "Downgrading MUR to Neutral from OW.We are downgrading MUR to N from OW to better balance our ratings skew given our more mixed fundamental view for oil. We had upgraded MUR to OW (from Neutral) in December 2022, as we argued that companies with conventional assets could benefit in an upbeat macro environment due to advantaged decline rates and limited concerns on inventory depth relative to their U.S. shale peers. However, the combination of near-record U.S. oil supply, prospects for OPEC+ barrels to return in the Fall, and an overall mixed macro tape has softened our near-term enthusiasm for our oil levered E&P coverage. MUR was the only oily company in our coverage group that decreased its FY24 oil production guide during 2Q24 earnings (decreased by a modest 1% at unchanged capex). Our updated modeling now forecasts 96 MBo/d of oil production in 2025, which is 6% below consensus estimates at slightly higher capex (JPMe at $1.11bn vs. STe at $1.08bn). We trim our Dec-24 PT to $47 from $50, which assumes 70% of our NAV estimate. We see a similar risk-reward to our broader SMid Cap E&P coverage thereby justifying our Neutral rating."

For an analyst ratings summary and ratings history on Murphy Oil Corp. click here. For more ratings news on Murphy Oil Corp. click here.

Shares of Murphy Oil Corp. closed at $36.75 yesterday.

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