Piper Sandler Upgrades Marathon Oil After Strong Management Message

Marathon Oil Corporation (NYSE: MRO) expects to return up to $3.1 billion to shareholders in 2022, which equates to around 20% of its shares outstanding, according to Piper Sandler.

The Marathon Oil Analyst: Mark Lear upgraded the rating for Marathon Oil from Neutral to Overweight, while raising the price target from $22 to $27.

The Marathon Oil Thesis: A few of the energy companies took advantage of the omicron-led increase in oil prices in the fourth quarter to “opportunistically repurchase stock,” Lear said in the upgrade note.

Marathon Oil repurchased around $1 billion worth of stock from the fourth quarter through mid-February, the analyst mentioned. “Operators have highlighted cost and supply chain pressures that would result in lower efficiency and return degradation with incremental activity, and therefore are expected to return excess cash to shareholders,” he added.

The “escalating Ukraine tensions and the risk potential Russia sanctions could have on global oil supply” are tailwinds for energy stocks, Lear said.

MRO Price Action: Shares of Marathon Oil had risen by 2.27% to $22.09 at the time of publication Wednesday morning.

Photo: Courtesy Marathon