Murphy Oil Corporation (NYSE:MUR) shares are upgraded from Sell to a Hold rating by analyst Glickman of S&P Capital IQ. He also boosted his price target by $8 from $24 to $32 on the stock. This implied that the stock is fairly priced at current levels.
The brokerage indicated that the price objective was based on a 4X multiple of price to estimated 2018 operating cash flow, modestly above the company’s historical average but below its rivals. Glickman boosted his 2017 EPS estimate on Murphy Oil by 14 cents a share to $0.27. He has established his EPS view at $0.84 for the year 2018.
The analyst noted the loss per share of 16 cents in the fourth quarter. This was narrow by a penny from Capital IQ consensus.
Glickman told his clients in his note that “We see MUR with above-average free cash flow potential in ’17 and ’18, with an improved cost structure, and with multiple regions of growth potential. Dividend payout remains high but we could see MUR supporting it via excess free cash flow.”