Marathon Oil (NYSE:MRO) Upside Limited on Recent Performance, Weak Upstream

Marathon Oil's (NYSE:MRO) short-term performance should be limited by its recent strong performance, according to Barclays, and its weak upstream.

Barclays noted, "Based on our estimate and the geographic location of Marathon's refineries, we conservatively estimate that MPC could trade at a higher EV/2011 EBIDA multiple than VLO (6.3x), but lower than FTO (11.6x), or a range of 6.5x-7.0x. However, due to MRO's weaker upstream portfolio, we think the business will trade at a 0.5x-1.0x discount to the independent E&P companies' average EV/2011 EBIDA of 7.0x (based on $93/bl oil), or a range of 6.0x-6.5x. We estimate Marathon's sum-of-the-parts at $45/share and believe the upside could be limited over the next several months given the stock's strong performance since December, the market's speculation of this announcement since the TSO MLP announcement, as well as the company's intention to maintain 100% of its logistics assets."

Barclays reiterates an "Equalweight" rating on Marathon Oil, which closed Friday at $42.59, losing $0.39, or 0.91 percent. Barclays has a price target on Marathon of $38.