Earnings Beat: Murphy Oil Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

The quarterly results for Murphy Oil Corporation (NYSE:MUR) were released last week, making it a good time to revisit its performance. Revenues were US$803m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.83 were also better than expected, beating analyst predictions by 15%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Murphy Oil

After the latest results, the consensus from Murphy Oil's twelve analysts is for revenues of US$3.25b in 2024, which would reflect a perceptible 4.2% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to decrease 8.3% to US$3.62 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.33b and earnings per share (EPS) of US$3.65 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at US$51.53even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Murphy Oil analyst has a price target of US$67.00 per share, while the most pessimistic values it at US$44.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Murphy Oil shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.3% by the end of 2024. This indicates a significant reduction from annual growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Murphy Oil is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Murphy Oil. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Murphy Oil analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Murphy Oil .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.