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Investing.com - Wells Fargo (NYSE:WFC) has raised its price target on Murphy Oil Corp . (NYSE:MUR) to $26.00 from $24.00 while maintaining an Equal Weight rating on the stock. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period, with price targets ranging from $23 to $40.
The firm adjusted its Q2’25 and FY’25 estimates to reflect updated production, operating expenses, and price realization assumptions. Wells Fargo now models Q2’25 adjusted EBITDA of $328 million and earnings per share of $0.26, compared to consensus estimates of $310 million and $0.20 respectively. The company has demonstrated solid financial performance with a healthy gross profit margin of 75% and maintains an overall "GOOD" financial health rating on InvestingPro.
At recent strip prices, Wells Fargo projects free cash flow generation of $293 million for FY25 and $418 million for FY26 under standard definitions, or $43 million and $170 million under Murphy Oil’s definition.
The firm noted that Murphy Oil offers compelling exploration upside in Vietnam, Côte d’Ivoire, and the Gulf of Mexico, with offshore inventory approximately five times its offshore proven reserve base. In Vietnam, the Hai Su Vang prospect tested well and may exceed its estimated 300 million barrels of oil equivalent, with an appraisal well set for Q3’25.
Wells Fargo values Murphy Oil at $26 per share based on 90% of its net asset value estimate, with shares trading at approximately 3.6x and 3.3x on 2025-26 estimated EV/EBITDX, representing a modest premium/discount to small and mid-cap oil-weighted exploration and production peers. Currently trading at an EV/EBITDA of 3.58x and P/E of 9.16x, InvestingPro analysis suggests the stock is undervalued, with additional insights available in the comprehensive Pro Research Report.
In other recent news, Murphy Oil Corporation reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.56, compared to the forecasted $0.48. However, the company’s revenue slightly missed projections, registering $672.73 million against the anticipated $676.24 million. In terms of analyst ratings, S&P Global Ratings downgraded Murphy Oil’s outlook from stable to negative, citing weaker-than-expected credit measures and outspending of internally generated cash flow. Despite this, the company’s ’BB+’ credit rating was affirmed. Mizuho (NYSE:MFG) Securities also downgraded Murphy Oil’s stock rating from Outperform to Neutral, setting a new price target of $31.00, influenced by expected global oil price dips. Additionally, JPMorgan adjusted its price target for Murphy Oil to $25.00 from $27.00 while maintaining a Neutral rating. The company has been focusing on its offshore exploration strategy, which has led to significant discoveries, including potential world-class finds at the Hai Su Vang and Lac Da Hang wells. These developments continue to shape the outlook for Murphy Oil in the energy sector.
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