Marathon Oil’s Solid Balance Sheet & Shareholder Returns Prompt 30% Price Target Hike By This Analyst

• Raymond James analyst John Freeman reiterated a Strong Buy rating on the shares of Marathon Oil Corp (NYSE: MRO) and raised the price target from $37 to $48.

• The analyst said Q3 earnings were strong for Marathon, with production out of Delaware exceeding expectations.

• Buybacks impressed to the upside as the company paid out ~80% of operational cash flow for the quarter, he added.

• The only miss was on capex, Marathon had to raise their guidance from $1.3 billion to $1.4 billion for the year.

• Freeman believes Marathon remains in an excellent position to be a leader in shareholder returns, with his updated model projecting a 13% yield on buybacks and a 15% total yield when accounting for the base dividend.

• The analyst said the company has a strong balance sheet and top-tier return strategy.

• He thinks Marathon represented one of the few companies in his coverage with steady and rising per-share metrics, thanks to their incredibly aggressive buyback program.

• Freeman specified that the company would build cash next year for debt reduction, further buybacks, and/or additional acquisitions.

• Price Action: MRO shares are trading lower by 1.42% at $29.96 on the last check Monday.

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