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Mizuho lifts Marathon Oil shares target on COP acquisition terms

EditorEmilio Ghigini
Published 05/06/2024, 12:12

On Wednesday, Mizuho Securities adjusted its price target for Marathon Oil Corporation (NYSE:MRO) shares, increasing it to $34.00 from the previous $33.00. The firm has maintained a Neutral rating on the stock.

The revision reflects the recent acquisition terms set forth by ConocoPhillips (NYSE:COP), which last week announced its intention to acquire Marathon Oil. Under the agreement, Marathon Oil shareholders are set to receive 0.255 shares of ConocoPhillips for each share of Marathon Oil they own.

The analyst at Mizuho highlighted that the new price target is based on the exchange ratio provided in the deal with ConocoPhillips, as well as a net asset value (NAV)-based price target of $132 per share for ConocoPhillips.

Despite the increase in the price target for Marathon Oil, the analyst's valuation of the company's standalone NAV remains unchanged at $33 per share.

The transaction is structured as an all-stock deal, which allows Marathon Oil shareholders to directly benefit from the value of ConocoPhillips shares post-acquisition.

According to the analyst, there have been no changes to the financial estimates for Marathon Oil, suggesting that the current fundamentals of the company are expected to remain consistent.

The analyst reiterated their Neutral stance on Marathon Oil shares, indicating that while the acquisition terms have been factored into the new price target, the firm's overall outlook on the stock has not shifted.

This rating suggests that the analyst believes Marathon Oil stock is currently valued appropriately in the market, considering the available information.

Marathon Oil's stock price will likely continue to be influenced by developments in the acquisition process and the performance of ConocoPhillips shares, which now play a role in determining the value received by Marathon Oil shareholders.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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