Murphy Oil (MUR): Examining Valuation as Stock Rises After Downgrade and Strong Production Results

Murphy Oil (MUR) saw its stock climb over 3% following a recent downgrade from Piper Sandler. Investors seemed impressed by the company’s solid third-quarter production results and reaffirmed production guidance for 2025.

See our latest analysis for Murphy Oil.

Murphy Oil’s recent 9.5% one-month share price return and a rapid 37% gain over the past quarter signal fresh momentum, especially considering its strong third-quarter production numbers and reaffirmed 2025 guidance. Despite this short-term rally, the stock’s total shareholder return remains negative over the past year, which suggests that longer-term investors are still waiting for sustained evidence of a comeback.

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So with robust operational momentum and mixed analyst sentiment, do Murphy Oil shares remain undervalued following the recent rally, or is the market already anticipating future growth potential and leaving little room for upside?

Most Popular Narrative: 7.8% Overvalued

With Murphy Oil shares closing at $30.53, the most widely followed narrative now sets its fair value at $28.33, slightly below the market price. This suggests the current rally may have already priced in much of the upside, with new assumptions recalibrating the outlook.

Durable cost reductions company-wide, including a structural lowering of operating expenses in the Eagle Ford, ongoing G&A and interest savings, and competitive rig contracting in Côte d'Ivoire, are expected to structurally improve net margins and support robust free cash flow generation.

Read the complete narrative.

Curious how aggressive cost slashing and better capital discipline shape this value estimate? There is one major growth lever that could flip the narrative. Discover what financial forecast underpins that key fair price calculation.

Result: Fair Value of $28.33 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Murphy Oil's heavy reliance on offshore production, along with its exposure to commodity price swings, still pose notable risks to its long-term outlook.

Find out about the key risks to this Murphy Oil narrative.

Build Your Own Murphy Oil Narrative

If you’ve got a different perspective or want to dig into the numbers yourself, you can quickly build your own thesis and see how it stacks up: Do it your way

A great starting point for your Murphy Oil research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.

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