UPDATE: JPMorgan Downgrades Murphy Oil Corp. (MUR) to Neutral

May 5, 2022 5:39 AM EDT
Get Alerts MUR Hot Sheet
Price: $45.93 -3.37%

Rating Summary:
    12 Buy, 18 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 12 | Down: 16 | New: 15
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(Updated - May 5, 2022 5:40 AM EDT)

JPMorgan analyst Arun Jayaram downgraded Murphy Oil Corp. (NYSE: MUR) from Overweight to Neutral with a price target of $51.00.

The analyst comments "MUR has meaningful oil torque, which aligns with our positive macro view on oil prices. Furthermore, we see an important FCF inflection point for the company at mid-year 2022 given start-up of Khaleesi, Mormont, and Samurai fields, while the 2023 outlook should benefit from restart of Terra Nova field offshore Canada (7.5 MBo/d of net oil volumes). As a result, MUR’s FCF metrics move from below average to near the top of the peer group starting mid-year 2022. Despite this attractive backdrop, we anticipate more in-line performance as the company's cash return yields are below its peers as the company focuses on further deleveraging its balance sheet. In addition, the Cutthroat exploration well was a dry hole in 2Q22, which has reduced the optionality in the portfolio. Against this backdrop and our analytical work in our sustaining cash flow analysis, we believe a Neutral rating is justified."

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 $39.72 yesterday.

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