Shares of Marathon Oil Corp. MRO, +9.80% shot up 8.7% toward a one-year high in afternoon trading, enough to pace the S&P 500’s SPX, +0.45% gainers, after the natural gas company reported a narrower-than-expected fourth-quarter loss and provided upbeat outlook for capital expenditures and free cash flow (FCF). Trust analyst Neal Dingmann reiterated the buy rating he’s had on the stock since mid-January, while boosting his price target by 25%, to $15 from $12. His new target ties him Tudor Pickering Holt’s Matthew Portillo for the highest of the 29 analysts surveyed by FactSet. Dingmann highlighted the company’s plan of holding 2021 spending at about $1 billion, regardless of how much oil prices rise, so it can focus on debt repayment. “The capital discipline will not only provide meaningful FCF, but the program extends the life of the war chest of core Bakken and Eagle Ford locations to 10+ years, though an accretive acquisition is always possible,” Dingmann wrote in a research note. “While we forecast 1Q21 production to be sequentially lower, partially driven by the recent weather in Texas, we still believe the company could reward shareholders soon in some fashion.” The stock has soared 79.7% over the past three months, while the SPDR Energy Select Sector ETF XLE, +1.75% has rallied 26.4% and the S&P 500 SPX, +0.45% has gained 8.2%.
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