Marathon Petroleum’s Mixed Performance and Promising Outlook
Marathon Petroleum Corporation (MPC), located in Findlay, Ohio, operates as an integrated downstream energy company. With a market capitalization of $51.4 billion, it functions in two main areas: Refining & Marketing and Midstream.
Stock Performance Lags Behind the Market
Over the past year, shares of Marathon Petroleum have not fared well compared to the broader market. Although the stock increased by 7.4% in the last 52 weeks, this is significantly lower than the S&P 500 Index ($SPX), which returned 31.1% in the same period. Year to date (YTD) in 2024, MPC has risen by 7%, trailing SPX’s impressive 24.1% gains.
A Closer Look at Comparisons
When compared to the VanEck Oil Refiners ETF (CRAK), which declined by 9.5% over the past year and 8.2% YTD, MPC has performed relatively better.
Positive Earnings Surprise Boosts Stock
Despite the overall lackluster performance, MPC saw a 3.2% jump in its stock price on November 5, following a strong Q3 earnings report. The results exceeded Wall Street’s expectations thanks to higher-than-anticipated throughput and utilization rates, even amid declining global refining margins. Additionally, Marathon announced a $5 billion share repurchase program, raising its total buyback authorization to $8.5 billion.
Operational Success Amid Challenges
Although refining margins have been inconsistent, CEO Maryann Mannen stated she feels confident about the company’s ability to handle current market challenges. The firm processed 3 million barrels per day, outperforming projections of 2.8 million barrels. Earnings per share (EPS) hit $1.87, well above the anticipated 98 cents.
Looking Ahead: Expectations for EPS
For the ongoing fiscal year concluding in December, analysts predict a steep EPS decline of 59.4% compared to last year, estimating it at $9.59. However, it’s worth noting that Marathon has a track record of exceeding EPS forecasts in past earnings reports.
Analyst Views and Price Targets
Among 18 analysts tracking MPC, the consensus rating is a “Moderate Buy,” reflecting 12 “Strong Buy” ratings alongside six “Holds.”
This consensus rating has remained stable over recent months. On November 11, Barclays PLC (BCS) adjusted its price target for Marathon Petroleum from $168 to $159, yet kept an “Overweight” rating on the stock.
Potential Upside Analysis
Currently, the average price target for MPC stands at $177.44, suggesting a promising 11.7% increase from current levels. The most optimistic projection, set at $221, indicates a potential upside of 39.2%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
