KeyBanc Capital Markets has maintained a Sector Weight rating on Murphy Oil Corp. (NYSE:MUR) following the company's release of fourth-quarter results, signaling a neutral stance even as the firm highlighted several operational headwinds that could weigh on the shares.
Investment data shows Murphy Oil trading at a price-to-earnings ratio of 31.4, a level KeyBanc indicates is consistent with a fairly valued stock and aligned with the bank's neutral view.
While Murphy Oil reported adjusted earnings above expectations for the quarter, KeyBanc analyst Tim Rezvan underscored concerns tied to the company's outlook for 2026 and the year-end 2025 reserves figures. Those items, the analyst warned, have the potential to exert downward pressure on the stock.
Market data also points to a trend of analyst downgrades for near-term profitability: eight analysts have recently revised their earnings estimates downward for the coming period, and net income is projected to decline this year. Those revisions amplify the issues raised by KeyBanc and reflect investor scrutiny of the company's forward performance.
Murphy's guidance for 2026 calls for lower production of both oil and natural gas than had been anticipated. In particular, production at the Tupper Montney asset is expected to fall 10% year-over-year to 370 million cubic feet per day, with the company attributing the reduction to timing and royalty considerations.
On the liquids side, oil production is projected to drop by approximately 86,000 barrels per day, a move characterized in the company's outlook as a 5.5% decrease compared to analyst and consensus expectations. Simultaneously, capital spending is set to increase to $1.25 billion in 2026, with 43% of that spend planned for the first quarter.
The company also disclosed weaker proved developed reserves bookings, totaling 406 million barrels of oil equivalent, a 7.0% decline year-over-year. KeyBanc characterized that reserves decline, together with the production guidance, as a "material negative surprise."
Despite those operational concerns, Murphy Oil's dividend record remains notable: InvestingPro data notes the company has maintained dividend payments for 55 consecutive years and has recently increased its dividend by 8.3%.
In its quarterly financials, Murphy reported adjusted earnings per share of $0.14, which exceeded analysts' consensus that had been set at a loss of $0.02 per share. Revenue for the quarter, however, fell short of expectations, coming in at $613.08 million versus the consensus estimate of $641.15 million. Company commentary links the revenue shortfall to the production challenges highlighted in its guidance.
The mixed nature of the results - an earnings beat alongside a revenue miss and weakening production and reserves metrics - has drawn attention from market participants and underpins the continued caution signaled by KeyBanc's Sector Weight rating.
Context for investors
- Valuation: P/E ratio of 31.4, which KeyBanc views as consistent with a neutral rating.
- Earnings and revenue: Adjusted EPS of $0.14 beat a -$0.02 expectation, while revenue of $613.08 million missed the $641.15 million consensus.
- Operational outlook: 2026 guidance includes lower oil and gas production, a 10% decline at Tupper Montney to 370 million cubic feet per day, and a projected oil production decrease of ~86,000 barrels per day (a 5.5% shortfall vs analyst/consensus expectations).
- Capital and reserves: 2026 capex expected at $1.25 billion with 43% in Q1; proved developed reserves bookings of 406 million BOE, down 7.0% year-over-year.