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Marathon Petroleum Corporation (MPC)
NYSE:MPC
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Marathon Petroleum
(NYSE:MPC)
67Neutral
Positive Factors
Midstream Projects
The company announced new midstream projects aimed at expanding its value chain from the Permian to the Gulf Coast, indicating growth potential.
Renewable Fuels
MPC is a leading marketer of renewable fuels, benefiting from the shift in state laws supporting renewable fuel use.
Shareholder Returns
Marathon Petroleum returned a significant amount to shareholders through buybacks, showing commitment to enhancing shareholder value.
Negative Factors
Earnings Momentum
Slower earnings momentum from refining is expected, with earnings growth momentum anticipated to remain slow following broader industry trends.
Liquidity
Cash and short-term investments decreased significantly, indicating a potential reduction in liquidity.
Operational Risks
Key risks include business and operational risks such as disruption of crude supplies, failure of transportation infrastructure, energy price volatility, extreme weather conditions and operational accidents.
Marathon Petroleum (MPC) vs. S&P 500 (SPY)
Market Cap
$37.72B
Dividend Yield2.87%
Average Volume (3M)2.98M
Price to Earnings (P/E)12.0
Beta (1Y)0.93
Revenue Growth-6.70%
EPS Growth-57.85%
CountryUS
Employees18,300
SectorEnergy
Sector Strength61
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)9.94
Shares Outstanding311,531,370
10 Day Avg. Volume2,884,406
30 Day Avg. Volume2,982,309
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.34
Price to Cash Flow (P/CF)5.30
P/FCF Ratio7.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$171.08Price Target Upside41.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Marathon Petroleum Business Overview & Revenue Model
Company DescriptionMarathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. It operates in two segments, Refining & Marketing, and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States; and purchases refined products and ethanol for resale. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures aromatics, propane, propylene, and sulfur. It sells refined products to wholesale marketing customers in the United States and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets, as well as through long-term fuel supply contracts to direct dealer locations primarily under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats, and barges; gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. As of December 31, 2021, the company operated 7,159 brand jobber outlets in 37 states, the District of Columbia, and Mexico through independent entrepreneurs. Marathon Petroleum Corporation was founded in 1887 and is headquartered in Findlay, Ohio.
How the Company Makes MoneyMarathon Petroleum makes money primarily through three key revenue streams: refining and marketing, midstream, and retail. The refining and marketing segment is the largest contributor to revenue, involving the processing of crude oil into refined products like gasoline, diesel, and jet fuel, which are then sold to wholesalers, retailers, and other end-users. The midstream segment generates revenue by transporting, storing, and distributing crude oil and refined products through its extensive pipeline network and storage facilities. Lastly, the retail segment, including the Speedway brand, earns revenue from the sale of fuel and convenience store merchandise directly to consumers. Strategic partnerships and joint ventures in the midstream sector also play a significant role in enhancing MPC's earnings.
Marathon Petroleum Financial Statement Overview
Summary
Marathon Petroleum has shown strong profitability with improvements in net profit margins post-2020 and effective debt management. However, declining revenues and gaps in data for total assets and liabilities present challenges.Income Statement
Marathon Petroleum has demonstrated strong profitability with a consistent gross profit margin and EBIT margin despite fluctuations in total revenue. The company's net profit margin has shown recovery from negative results in 2020 to positive figures in subsequent years. However, there is a notable decline in total revenue over the years, especially from 2022 to 2023, which could be a concern moving forward.70
Positive
Balance Sheet
The company's balance sheet is stable with a positive equity ratio and a decreasing debt-to-equity ratio, indicating effective debt management over time. Return on equity has improved significantly, especially post-2020, reflecting better utilization of shareholder equity. However, some years show zero or missing values for total assets and liabilities, which may affect complete assessment.68
Positive
Cash Flow
The cash flow performance has been mixed. While operating cash flow has been positive, free cash flow has shown fluctuations, with a notable growth in 2022. The lack of data for 2024 poses challenges in assessing current cash flow health. Additionally, the free cash flow to net income ratio is not calculable for some periods due to missing free cash flow data.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 140.41B | 149.35B | 178.24B | 120.45B | 69.90B | Gross Profit |
| 14.17B | 20.78B | 26.57B | 10.44B | 4.16B | EBIT |
| 6.80B | 14.51B | 19.75B | 3.76B | -2.60B | EBITDA |
| 9.07B | 18.65B | 22.96B | 7.42B | -8.90B | Net Income Common Stockholders |
| 3.44B | 9.68B | 14.52B | 1.29B | -11.03B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.21B | 10.22B | 11.77B | 10.84B | 555.00M | Total Assets |
| 78.86B | 85.99B | 89.90B | 85.37B | 85.16B | Total Debt |
| 28.76B | 28.50B | 27.91B | 26.90B | 33.09B | Net Debt |
| 25.55B | 23.06B | 19.28B | 21.61B | 32.54B | Total Liabilities |
| 54.35B | 54.59B | 54.82B | 51.79B | 54.94B | Stockholders Equity |
| 25.71B | 24.40B | 27.71B | 26.21B | 22.20B |
| Cash Flow | Free Cash Flow | |||
| 6.13B | 12.23B | 13.94B | 2.90B | -368.00M | Operating Cash Flow |
| 8.66B | 14.12B | 16.36B | 4.36B | 2.42B | Investing Cash Flow |
| 1.53B | -3.10B | 623.00M | 14.80B | -3.26B | Financing Cash Flow |
| 0.00 | -14.21B | -13.65B | -14.42B | -135.00M |
Marathon Petroleum Technical Analysis
Negative
121.07
Price Trends
147.03
Negative
147.23
Negative
155.54
Negative
Market Momentum
0.18
Negative
50.60
Neutral
24.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MPC, the sentiment is Negative. The current price of 121.07 is below the 20-day moving average (MA) of 142.94, below the 50-day MA of 147.03, and below the 200-day MA of 155.54, indicating a bearish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 50.60 is Neutral, neither overbought nor oversold. The STOCH value of 24.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MPC.
Marathon Petroleum Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $38.10B | 16.58 | 8.88% | 2.22% | -4.35% | -37.69% | |
71 Outperform | $35.07B | 28.10 | 47.62% | 1.86% | 6.45% | 56.33% | |
70 Outperform | $43.70B | 21.46 | 7.27% | 4.66% | -2.81% | -68.00% | |
67 Neutral | $37.72B | 11.99 | 16.33% | 2.87% | -6.70% | -57.85% | |
64 Neutral | $35.71B | 7.94 | 12.20% | 5.03% | 31.55% | -9.00% | |
63 Neutral | $35.94B | 13.32 | 10.86% | 4.14% | -10.37% | -65.69% | |
57 Neutral | $7.70B | 4.18 | -3.52% | 8.32% | 0.35% | -64.68% |
* Energy Sector Average
Performance Comparison
MPC
Marathon Petroleum
121.07
-91.39
-43.02%
OXY
Occidental Petroleum
40.54
-26.99
-39.97%
PSX
Phillips 66
98.81
-64.11
-39.35%
TRGP
Targa Resources
161.19
47.54
41.83%
VLO
Valero Energy
104.69
-70.99
-40.41%
FANG
Diamondback
123.37
-76.33
-38.22%
Marathon Petroleum Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -17.17% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, safety achievements, and strategic growth in midstream and international markets. However, it also acknowledged challenges in refining margins, high turnaround costs, and regulatory uncertainties. Overall, the sentiment is cautiously optimistic with significant positive achievements overshadowing current challenges.Highlights
Strong Financial Performance
MPC reported adjusted earnings per share of $0.77 for the fourth quarter and $9.51 for the full year. Adjusted EBITDA for the year was $11.3 billion, with a return of $10.2 billion in capital to shareholders.
Record Safety and Environmental Performance
Achieved the lowest OSHA recordable injury rate and strongest environmental performance in the last five years.
Midstream and MPLX Growth
MPLX increased its quarterly distribution by 12.5%, with a full-year adjusted EBITDA growth of 6% and a compound annual growth rate of 7% since 2021.
Strategic Investments and Future Projects
Announced significant projects like the Galveston Bay distillate hydrotreater, Los Angeles Refinery upgrades, and the Robinson Product Flexibility Project, all promising returns of over 20%.
Export and Commercial Execution
MPC's export strategy set records on volume and margin, enhancing capture rates to 119% in the fourth quarter.
Lowlights
Fourth Quarter Refining Margin Weakness
Fourth quarter refining margins exhibited typical seasonal weakness, with adjusted EBITDA per barrel dropping to $2.03.
Turnaround and Operating Cost Challenges
Projected high turnaround expenses of $1.4 billion for the year, with operating costs expected to be $5.70 per barrel in the first quarter of 2025.
Regulatory and Market Uncertainties
Uncertainties around renewable diesel margins with the expiration of the BTC and the potential impact of tariffs on heavy crude imports.
Company Guidance
During the Marathon Petroleum Corporation (MPC) fourth quarter 2024 earnings call, the company provided comprehensive guidance and insights into various metrics. MPC reported an adjusted earnings per share of $0.77 for the fourth quarter and $9.51 for the full year, with adjusted EBITDA of approximately $2.1 billion for the quarter and $11.3 billion for the year. The refining and marketing segment achieved an adjusted EBITDA per barrel of $5.33, maintaining a refining utilization rate of 92% and a commercial capture rate of 99%. The midstream segment, including MPLX, recorded a 6% increase in adjusted EBITDA year-over-year, while MPLX's quarterly distribution rose by 12.5%, reaching an annualized cash distribution of $2.5 billion to MPC. The company also emphasized its capital allocation priorities, with a 2025 capital outlook of $1.25 billion for MPC, excluding MPLX, and a $2 billion capital outlook for MPLX. MPC highlighted a peer-leading capital return of $10.2 billion, representing a 23% capital return yield. Looking forward, MPC anticipates a record demand for refined products in 2025, expecting improved refining margins in the year's second half due to announced refinery closures. The company remains focused on safe and reliable operations, commercial performance, and structural advantages in the U.S. refining industry, positioning itself for competitive success amid evolving market conditions.Marathon Petroleum Corporate Events
Executive/Board ChangesShareholder Meetings
Marathon Petroleum Board Member Susan Tomasky to Retire
Neutral
Jan 24, 2025
Susan Tomasky has announced her decision to retire from the Board of Marathon Petroleum Corporation, effective at the conclusion of the company’s annual meeting on April 30, 2025. Her retirement is not due to any disagreements with the company’s operations or management, suggesting a smooth transition and maintaining stability for stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.