Murphy Oil’s Earnings Expectations are Rising; Should You Invest Now?


Murphy Oil (NYSE:MUR)

Given the remarkable improvement in the company’s profits projections, Murphy Oil (NYSE:MUR) could be a good option for investors to consider. The stock’s recent performance has been very encouraging, and this positive trend may continue shortly, given that analysts continue to raise their earnings estimates for the company.

This oil and gas producer’s rising trend in estimate revisions suggests increased optimism among analysts regarding the company’s earnings potential, which should eventually get reflected in the company’s stock price. After all, empirical research demonstrates a significant association between shifting patterns of earnings estimate revisions and changes in the near-term stock price. This understanding is the foundation for our stock grading tool that, we refer to as the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. On the other hand, Zacks Rank #5 stocks have generated an average annual return of -5% since 2008.

The covering analysts have come to a unanimous decision to raise their earnings projections for Murphy Oil (NYSE:MUR), which has contributed to the significant upward movement of the consensus earnings estimate for the upcoming quarter and the entire year.

Revisions Made to the Current-Quarter Estimate

It is anticipated that the firm will earn $1.63 per share for the upcoming quarter, which represents an increase of +579.17% compared to the same period last year.

In the last month, there have been five different revisions to the projections provided by Murphy Oil (NYSE:MUR), with three upward and two downward. Consequently, the Zacks Consensus Estimate has improved by 6.73 percent.

Revisions Made to the Current Year’s Estimate

It is anticipated that the firm will earn $6.14 per share for the entire year, an increase of +375.97% compared to the previous year’s earnings.

A tendency toward upward revisions of estimates for the current year has been seen, which provides cause for optimism. For Murphy Oil (NYSE:MUR), there have been six upward changes to their predictions over the past month, while there have been 0 downward revisions. This has resulted in a 17.8 percentage point increase to the current consensus estimate.

Bottom Line

Although positive estimate revisions for Murphy Oil (NYSE:MUR) have attracted decent investments and pushed the stock higher by 20.1% over the previous four weeks, there is still the possibility that the company has more room to appreciate. As a result, you should consider including it in your portfolio soon.

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.