Morgan Stanley analyst Devin McDermott upgraded Marathon Oil to Overweight from Equal Weight with a price target of $28, up from $27. The company’s recent acquisition of Ensign Natural Resources in the Eagle Ford adds 130,000 net acres in the basin with more than 600 undrilled locations, helping address investor concerns around Marathon’s inventory life, the analyst tells investors in a research note. In addition, the firm does not expect Marathon to be a cash taxpayer in 2023 as the Ensign acquisition helps defer the 15% alternative minimum tax until 2024. It estimates the transaction is 24% accretive to free cash flow per share in 2023.
Published first on TheFly
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