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Is Marathon Oil Corporation (MRO) Stock Over or Undervalued?

Thursday, August 11, 2022 03:40 PM | InvestorsObserver Analysts
Is Marathon Oil Corporation (MRO) Stock Over or Undervalued?

InvestorsObserver gives Marathon Oil Corporation (MRO) a weak valuation score of 25 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. MRO currently holds a better value than 25% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 25
MRO gets a 25 Valuation Rank today. Find out what this means to you and get the rest of the rankings on MRO!

Metrics Analysis

MRO's trailing-12-month Price to Earnings (PE) ratio of 5.3 puts it below the historical average of roughly 15. MRO is a good value at its current trading price as investors are paying less than what its worth in relation to the company's earnings. MRO's trailing-12-month earnings per share (EPS) of 4.20 does justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
MRO's 12-month-forward PE to Growth (PEG) ratio of 0.31 is considered a good value as the market is undervaluing MRO in relation to the company's projected earnings growth. MRO's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

MRO' has a strong valuation at its current share price on account of a undervalued PEG ratio despite strong growth. MRO's PE and PEG are better than the market average leading to a above average valuation score. Click Here to get the full Report on Marathon Oil Corporation (MRO) stock.

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