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Murphy USA (MUSA) Down 1.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have lost about 1.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Murphy USA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Murphy USA’s Q4 Earnings Miss Estimate
Murphy USA announced fourth-quarter 2022 earnings per share of $5.21, which missed the Zacks Consensus Estimate of $6.16. The underperformance could be attributed to lower-than-expected petroleum product sales.
However, MUSA’s bottom line was significantly above the year-earlier quarter’s adjusted profit of $4.23 per share, backed by a rise in the retail gasoline price and a higher retail margin of 30.6 cents per gallon, up 11.3% year over year.
Meanwhile, Murphy USA’s operating revenues of $5.4 billion rose 12.6% year over year and brushed past the consensus mark by $47 million, primarily due to improved merchandise sales.
Merchandise sales, at $989.4 million, rose 6.7% year over year and outperformed the consensus mark of $970 million. However, revenues from petroleum product sales came in at $4.3 billion, falling 1.8% short of the Zacks Consensus Estimate but up 13.6% from the fourth quarter of 2021.
Key Takeaways
MUSA’s total fuel contribution rose 20.1% year over year to $369.3 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 30.6 cents per gallon, which improved more than 11% from the fourth quarter of 2021.
Retail fuel contribution increased 19.6% year over year to $341.2 million as margins widened to 28.3 cents per gallon from 25.5 cents in the corresponding period of 2021. Retail gallons rose 7.8% from the year-ago period to 1,206.3 million in the quarter under review and edged past the Zacks Consensus Estimate by 0.4%. Volumes on an SSS basis (or fuel gallons per store) improved 5.2% from the fourth quarter of 2021 to 241.6 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.19 per gallon, up from $3.05 per gallon a year ago.
Contribution from Merchandise increased 4.2% to $189 million on higher sales, which more than offset the fall in unit margins, from 19.6% a year ago to 19.15% in the fourth quarter of 2022. On an SSS basis, total merchandise contribution was up 3.1% year over year, primarily on the back of 5.5% higher tobacco margins. Meanwhile, merchandise sales increased 4.4% on an SSS basis due to an increase in tobacco as well as non-tobacco sales.
The company’s monthly fuel gallons were up 5.4% from the prior-year period, while merchandise sales increased 4.7% on an average per store month basis.
Balance Sheet
As of Dec 31, Murphy USA — which opened 13 new retail locations in the quarter to take its store count to 1,712 — had cash and cash equivalents of $60.5 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 73.7%.
During the quarter, MUSA bought back shares worth $239.5 million.
Guidance
The company projects 2023 fuel volume in a range of 240 to 245 thousand gallons on an APSM basis. Further, Murphy USA’s 2023 guidance includes up to 45 new stores and up to 30 raze-and-rebuilds, $795-$815 million in merchandise margin contribution, and $375-$425 million in capital expenditures.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Murphy USA has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Murphy USA has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Murphy USA is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO - Free Report) , a stock from the same industry, has gained 4.6%. The company reported its results for the quarter ended December 2022 more than a month ago.
Valero Energy reported revenues of $41.75 billion in the last reported quarter, representing a year-over-year change of +16.3%. EPS of $8.45 for the same period compares with $2.47 a year ago.
For the current quarter, Valero Energy is expected to post earnings of $6.90 per share, indicating a change of +198.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Valero Energy. Also, the stock has a VGM Score of A.
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Murphy USA (MUSA) Down 1.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Murphy USA (MUSA - Free Report) . Shares have lost about 1.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Murphy USA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Murphy USA’s Q4 Earnings Miss Estimate
Murphy USA announced fourth-quarter 2022 earnings per share of $5.21, which missed the Zacks Consensus Estimate of $6.16. The underperformance could be attributed to lower-than-expected petroleum product sales.
However, MUSA’s bottom line was significantly above the year-earlier quarter’s adjusted profit of $4.23 per share, backed by a rise in the retail gasoline price and a higher retail margin of 30.6 cents per gallon, up 11.3% year over year.
Meanwhile, Murphy USA’s operating revenues of $5.4 billion rose 12.6% year over year and brushed past the consensus mark by $47 million, primarily due to improved merchandise sales.
Merchandise sales, at $989.4 million, rose 6.7% year over year and outperformed the consensus mark of $970 million. However, revenues from petroleum product sales came in at $4.3 billion, falling 1.8% short of the Zacks Consensus Estimate but up 13.6% from the fourth quarter of 2021.
Key Takeaways
MUSA’s total fuel contribution rose 20.1% year over year to $369.3 million due to margin expansion and higher volumes. Total fuel contribution (including retail fuel margin plus product supply and wholesale results) came in at 30.6 cents per gallon, which improved more than 11% from the fourth quarter of 2021.
Retail fuel contribution increased 19.6% year over year to $341.2 million as margins widened to 28.3 cents per gallon from 25.5 cents in the corresponding period of 2021. Retail gallons rose 7.8% from the year-ago period to 1,206.3 million in the quarter under review and edged past the Zacks Consensus Estimate by 0.4%. Volumes on an SSS basis (or fuel gallons per store) improved 5.2% from the fourth quarter of 2021 to 241.6 thousand. Meanwhile, the average retail gasoline price during the quarter came in at $3.19 per gallon, up from $3.05 per gallon a year ago.
Contribution from Merchandise increased 4.2% to $189 million on higher sales, which more than offset the fall in unit margins, from 19.6% a year ago to 19.15% in the fourth quarter of 2022. On an SSS basis, total merchandise contribution was up 3.1% year over year, primarily on the back of 5.5% higher tobacco margins. Meanwhile, merchandise sales increased 4.4% on an SSS basis due to an increase in tobacco as well as non-tobacco sales.
The company’s monthly fuel gallons were up 5.4% from the prior-year period, while merchandise sales increased 4.7% on an average per store month basis.
Balance Sheet
As of Dec 31, Murphy USA — which opened 13 new retail locations in the quarter to take its store count to 1,712 — had cash and cash equivalents of $60.5 million and long-term debt (including lease obligations) of $1.8 billion, with a debt-to-capitalization of 73.7%.
During the quarter, MUSA bought back shares worth $239.5 million.
Guidance
The company projects 2023 fuel volume in a range of 240 to 245 thousand gallons on an APSM basis. Further, Murphy USA’s 2023 guidance includes up to 45 new stores and up to 30 raze-and-rebuilds, $795-$815 million in merchandise margin contribution, and $375-$425 million in capital expenditures.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Murphy USA has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Murphy USA has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Murphy USA is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO - Free Report) , a stock from the same industry, has gained 4.6%. The company reported its results for the quarter ended December 2022 more than a month ago.
Valero Energy reported revenues of $41.75 billion in the last reported quarter, representing a year-over-year change of +16.3%. EPS of $8.45 for the same period compares with $2.47 a year ago.
For the current quarter, Valero Energy is expected to post earnings of $6.90 per share, indicating a change of +198.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Valero Energy. Also, the stock has a VGM Score of A.