Ahead of the Bell: Murphy Oil expected to outperform S&P 500

NEW YORK—Murphy Oil Corp. will likely outperform the Standard & Poor's 500 this year, an analyst said Thursday, after the oil and natural gas company's first-quarter profit more than tripled on higher crude prices.

"We believe Murphy Oil has one of the strongest production growth profiles and highest reserve upside potential in the sector," Oppenheimer & Co. analyst Fadel Gheit said in a note to clients. "Successful exploration and improved operations further enhance the company's outlook."

Rising production in Malaysia's Kikeh Fiel and other new projects could "double production over the next two years," he said, keeping a "Perform" rating on the stock.

Deutsche Bank analyst Paul Sankey kept a "Buy" rating and $104 price target on the El Dorado, Ark., company, implying he expects the stock to jump 15 percent over Wednesday's $90.34 close in the next year.

Murphy Oil forecast second-quarter earnings between $1.90 and $2.10 per diluted share, while analysts polled by Thomson Financial, on average, expect earnings of $2.01 per share.

Sankey cut his estimates for the second quarter to $1.61 per share from $2.36 per share, and said a company as relatively small as Murphy may experience "operational volatility."

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