Skip to Content
Morningstar

Marathon Oil: Reducing Fair Value Estimate by $3 Per Share to $27

""

We’re reducing our fair value estimate for Marathon MRO to $27 per share from $30 after marking our model to market for near-term oil, gas, and liquefied natural gas forward curves, and correcting a modeling error (we were previously overstating the benefit of the firm’s contractual linkage to global LNG pricing from 2024 for its gas processing assets in Equatorial Guinea). This reduces our star rating to 3 stars from 4. However, our earlier conclusion—that the market is underestimating the upside from Equatorial Guinea—still looks valid, given that the stock trades at a discount to our updated valuation. That makes Marathon one of only three exploration and production firms with a favorable price/fair value ratio, albeit one that no longer implies sufficient margin of safety for the 4-star rating.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

More in Stocks

About the Author

Dave Meats

Director
More from Author

David Meats, CFA, is director of research, energy and utilities, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

Before joining Morningstar in 2014, Meats was an associate analyst for Raymond James. Previously, he worked as a geophysicist for Burren Energy, a London-based exploration and production firm, and Italian multinational oil and gas firm Eni SpA, which acquired Burren in 2008.

Meats holds an undergraduate degree in physics from the University of Nottingham, a master’s degree in petroleum geoscience from Royal Holloway, University of London, and a master’s degree in business administration from the University of Chicago Booth School of Business. He also holds the Chartered Financial Analyst® designation.

Sponsor Center