Marathon Petroleum (MPC) AI Stock Analysis

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Marathon Petroleum

(NYSE:MPC)

67Neutral

Marathon Petroleum presents a mixed outlook. The company has shown resilience in financial performance and strategic growth in the midstream segment, but faces challenges such as declining revenue and bearish technical indicators. The reasonable valuation and promising earnings call sentiment suggest potential for recovery, but caution is warranted due to regulatory uncertainties and market conditions.

Positive Factors

Midstream Performance

Midstream earnings exceeded expectations, highlighting strong performance in this segment.

Operational Performance

Marathon Petroleum's refining utilization came in above expectations, demonstrating strong operational performance.

Shareholder Returns

Marathon Petroleum returned a significant amount to shareholders through buybacks, showing commitment to enhancing shareholder value.

Negative Factors

Liquidity Concerns

Cash and short-term investments decreased significantly, indicating a potential reduction in liquidity.

Refining Segment Challenges

Elevated turnaround activity is impacting utilization and weighing on capture rates in the refining segment.

Renewable Diesel Segment

The switch from BTC to PTC is expected to weigh on renewable diesel segment results.

Marathon Petroleum (MPC) vs. S&P 500 (SPY)

Market Cap

$42.90B

Dividend Yield2.52%

Average Volume (3M)3.11M

Price to Earnings (P/E)13.6

Beta (1Y)0.89

Revenue Growth-6.70%

EPS Growth-57.85%

CountryUS

Employees18,300

SectorEnergy

Sector Strength47

IndustryOil & Gas Refining & Marketing

Share Statistics

EPS (TTM)9.94

Shares Outstanding311,531,370

10 Day Avg. Volume2,335,069

30 Day Avg. Volume3,107,452

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.80

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit5.44

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$160.33

Price Target Upside16.42% 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 Key Performance Indicators (KPIs)

Any

Adjusted EBITDA by Segment

Adjusted EBITDA by Segment
Shows earnings before interest, taxes, depreciation, and amortization for each segment, offering a clear view of operational efficiency and cash flow generation, crucial for assessing financial health and investment potential.

Chart InsightsMarathon Petroleum's refining and marketing segment has seen a significant decline in adjusted EBITDA, reflecting challenges in refining margins and high turnaround costs. However, the midstream segment, including MPLX, shows robust growth with a 6% increase in adjusted EBITDA and a 12.5% rise in quarterly distribution. The earnings call highlights strategic investments and a strong export strategy, positioning MPC to capitalize on expected record demand and improved margins in 2025, despite current regulatory and market uncertainties.

Data provided by:

Main Street Data

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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Neutral

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Neutral

Last Price137.72

Price Trends

50DMA

139.02

Negative

100DMA

142.56

Negative

200DMA

152.10

Negative

Market Momentum

MACD

-0.25

Negative

RSI

54.04

Neutral

STOCH

89.39

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MPC, the sentiment is Neutral. The current price of 137.72 is above the 20-day moving average (MA) of 129.18, below the 50-day MA of 139.02, and below the 200-day MA of 152.10, indicating a neutral trend. The MACD of -0.25 indicates Negative momentum. The RSI at 54.04 is Neutral, neither overbought nor oversold. The STOCH value of 89.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MPC.

Marathon Petroleum Peers Comparison

Overall Rating

UnderperformOutperform

Sector (56)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FANG	68 Neutral	$37.94B	8.31	12.20%	4.70%	31.55%	-9.00%
OXY	68 Neutral	$38.00B	16.54	8.88%	2.28%	-4.35%	-37.69%
VLO	67 Neutral	$35.98B	40.50	3.73%	3.74%	-8.44%	-85.95%
MPC	67 Neutral	$42.90B	13.64	16.33%	2.52%	-6.70%	-57.85%
PSX	66 Neutral	$42.15B	23.60	6.48%	4.42%	-7.61%	-66.18%
TRGP	63 Neutral	$37.19B	29.79	47.62%	1.75%	6.45%	56.33%
Sector *	56 Neutral	$6.92B	3.31	-4.49%	6.03%	-0.35%	-47.83%

* Energy Sector Average

Performance Comparison

MPC

Marathon Petroleum

137.72

-41.42

-23.12%

OXY

Occidental Petroleum

40.44

-23.10

-36.36%

PSX

Phillips 66

103.46

-35.60

-25.60%

TRGP

Targa Resources

162.34

51.52

46.49%

VLO

Valero Energy

114.88

-37.93

-24.82%

FANG

Diamondback

134.83

-56.23

-29.43%

Marathon Petroleum Earnings Call Summary

Earnings Call Date:Feb 04, 2025

(Q4-2024)

% Change Since: -5.77%|

Next Earnings Date:May 06, 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.

Q4-2024 Updates

Positive Updates

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.

Negative Updates

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 Changes

Marathon Petroleum Announces Executive Vice President Retirement

Neutral

Apr 30, 2025

On April 28, 2025, Marathon Petroleum announced the retirement of Timothy J. Aydt, Executive Vice President of Refining, effective September 2, 2025, after over 40 years of service. Mike Henschen will succeed him on June 1, 2025, with Aydt remaining in a non-executive role to aid in the transition until his retirement.

Spark’s Take on MPC Stock

According to Spark, TipRanks’ AI Analyst, MPC is a Neutral.

To see Spark’s full report on MPC stock, click here.

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.