Will Marathon Oil (MRO) Beat Estimates Again in Its Next Earnings Report?

If you are looking for a stock that has a solid history of beating earnings estimates and is well-positioned to continue the trend in its next quarterly report, you should consider Marathon Oil (MRO). This company, which operates in the Zacks Oil and Gas – Integrated – United States industry, shows the potential for another earnings beat.

The energy company has a well-established reputation for beating earnings estimates, especially looking at the past two reports. The company boasts an average earnings surprise of 8.53% over the past two quarters.

For the last reported quarter, Marathon Oil showed earnings of $0.55 per share versus the Zacks consensus estimate of $0.52 per share, delivering a surprise of 5.77%. In the previous quarter, the company was expected to post earnings of $0.62 per share and actually produced earnings of $0.69 per share, delivering a surprise of 11.29%.

Price and EPS are surprising

Given this earnings history, Marathon Oil’s latest estimates are moving higher. In fact, the company’s Zacks Earnings ESP (Expected Surprise Prediction) is positive, which is a great sign of an earnings beat, especially when you combine this metric with its strong Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better deliver a positive surprise almost 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat consensus estimates could be as many as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a revision of the Zacks Consensus definition that is related to revision. The idea is that analysts revising their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other contributors to the consensus had previously predicted.

Marathon Oil currently has an Earnings ESP of +3.89%, suggesting that analysts have recently become bullish on the company’s earnings prospects. This positive Earnings ESP, combined with the stock’s Zacks Rank #3 (Hold), indicates that another beat is likely just around the corner.

Investors should remember, however, that a negative Earnings ESP reading does not indicate a failure to achieve expected profits, but a negative value reduces the predictive power of this indicator.

Many companies end up beating consensus EPS estimates, but that may not be the only basis for their stock growth. On the other hand, some stocks can maintain their position even if they end up missing consensus estimates.

For this reason, it is very important to check a company’s Earnings ESP before its quarterly release to increase your chances of success. Make sure you use our Earnings ESP Filter to discover the best stocks to buy or sell before they are released.

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report

Marathon Oil Corporation (MRO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research