TheStreet Ratings Top 10 Rating Changes
Marathon Oil Corp (MRO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- MRO's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that MRO's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
- Net operating cash flow has significantly decreased to $973.00 million or 62.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 58.1% when compared to the same quarter one year ago, falling from $996.00 million to $417.00 million.
Marathon Oil Corporation operates as an energy company worldwide. The company operates in three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. The company has a P/E ratio of 11.2, above the average energy industry P/E ratio of 7.9 and below the S&P 500 P/E ratio of 17.7. Marathon Oil has a market cap of $18.56 billion and is part of the basic materials sector and energy industry. Shares are down 10.6% year to date as of the close of trading on Wednesday.