On Thursday, RBC Capital adjusted its outlook for Murphy USA (NYSE:MUSA) shares by slightly lowering the price target from $538.00 to $537.00, while keeping a Sector Perform rating on the stock.
The revision follows Murphy USA's second-quarter results, which the firm described as solid, with earnings before interest, tax, depreciation, and amortization (EBITDA) largely meeting expectations. However, the company's earnings per share (EPS) were affected by certain items below the line.
The company's recent quarterly performance has led to a revision of its 2024 merchandise guidance. Murphy USA has decreased its forecast by $30-40 million, amounting to a 3.5-4.5% reduction, settling the expected range at $830-$840 million. This change is attributed to a downturn in consumer spending, particularly noticeable in the Northeast region.
RBC Capital's current projections had already anticipated a merchandise guidance figure close to the lower end of the revised range, with an estimate of $837 million. As a result, the firm's forecasts and price target have remained largely unchanged despite the updated guidance from Murphy USA.
Murphy USA's report and subsequent guidance update reflect broader trends observed in consumer behavior, as other consumer names that have reported second-quarter results have also indicated a more cautious outlook for the coming year.
The impact of these adjustments on Murphy USA's stock performance and investor sentiment may become more apparent as market conditions continue to evolve in response to consumer spending patterns.
In other recent news, Murphy USA has been the subject of several significant developments. The company's second-quarter results, described as solid by RBC Capital, led to a slight adjustment in the price target from $538.00 to $537.00, maintaining a Sector Perform rating.
Murphy USA also revised its 2024 merchandise guidance downwards by 3.5-4.5% due to a downturn in consumer spending, particularly in the Northeast region.
JPMorgan also revised its price target for Murphy USA, following first-quarter results that fell short of expectations, primarily due to challenges with fuel margins and merchandise sales. Despite these setbacks, the company's shares remained resilient, and fuel margins saw a recovery in the second quarter.
In another move, Murphy USA announced a 4.8% increase in its quarterly cash dividend for its common stock, now set at $0.44 per share. Additionally, the company reported mixed results for the first quarter of 2024, facing challenges from severe weather but showing resilience in its core fuel and tobacco businesses.
The company's strategic initiatives and focus on core business strengths position it well for continued growth. These are recent developments that have shaped the course of Murphy USA.
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