Investors who bought stocks during the COVID-19 market crash in 2020 have generally experienced some big gains in the past two years. But there is no question some big-name stocks performed better than others since the pandemic bottom.
Marathon’s Bumpy Road: One company that has been a great investment in the past two years has been oil producer Marathon Oil Corporation MRO.
Like many other companies, the COVID-19 pandemic crushed Marathon’s business in 2020. In fact, WTI crude oil prices briefly dropped below $0 during the worst of the pandemic sell-off as demand plummeted, and oil buyers ran out of storage space.
At the beginning of 2020, Marathon shares were trading at $13.69. By the beginning of March, the stock was down to $8.45 as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.
When the S&P 500 hit its pandemic bottom on March 23, Marathon shares traded down to $3.31. Unfortunately, while the S&P 500 bounced from there, Marathon still had not hit its crisis lows. In fact, Marathon dropped to $3.02 on April 1, 2020, as oil investors saw the writing on the wall.
On April 20, WTI crude oil futures contracts fell below $0 per barrel for the first time in history, settling at an unprecedented price of negative $37.63. The May 2020 WTI contracts expired the next day, and prices quickly recovered back into positive territory.
By early May, Marathon shares were back at above $5 and the Marathon rebound started to pick up steam. By June 2020, Marathon had made it above $8 before the rebound started running out of steam. Marathon pulled back to as low as $3.73 in October before the stock got hot once again.
Marathon In 2022, Beyond: WTI crude oil prices rallied to new post-pandemic highs above $65/bbl in March 2021, and Marathon shares topped $10 in February 2021. Inflation, global energy shortages and the war in Ukraine pushed crude oil prices as high as $130 in March 2022.
Inflation has weighed on many stocks, but it is good news for stocks in the energy sector like Marathon. In the most recent quarter, Marathon reported 73% revenue growth and $966 million in net income.
Marathon shares soared as high as $33.24 in May 2022 before softening oil prices temporarily halted the rally.
Marathon shares have pulled back to around $26.80 and WTI prices have retreated to $85.76, but inflation and energy supply shortages drag on.
Still, investors who bought Marathon stock the day it hit its 2020 pandemic low and held on have generated some impressive returns at this point. In fact, $1,000 in Marathon stock bought on March 23, 2020, would be worth about $8,484 today, assuming reinvested dividends.
Looking ahead, analysts are expecting Marathon stock to continue to march higher in the next 12 months. The average price target among the 22 analysts covering the stock is $32.50, suggesting 21.2% upside from current levels.