Marathon Petroleum Corporation (MPC), based in Findlay, Ohio, is an integrated downstream energy company. With a market capitalization of $51.4 billion, it operates across two segments: Refining & Marketing and Midstream.
Shares of the energy titan have underperformed the broader market over the past year. Despite rallying 7.4% over the past 52 weeks, MPC has lagged behind the S&P 500 Index’s ($SPX) 31.1% returns during the same time frame. In 2024, MPC is up 7%, lagging behind SPX’s 24.1% gains on a YTD basis.
Narrowing the focus, MPC has outperformed the Vaneck Oil Refiners ETF’s (CRAK) 9.5% decline over the past 52 weeks and an 8.2% plunge on a YTD basis.
Despite underwhelming performance over the past year, MPC stock popped 3.2% on Nov. 5, after posting a solid Q3 earnings report. It surpassed Wall Street estimates due to better-than-expected throughput and utilization rates, despite declining global refining margins. The company announced a $5 billion share repurchase program, bringing its total buyback authorization to $8.5 billion.
While refining margins were volatile, CEO Maryann Mannen expressed confidence in the company’s ability to navigate the challenging market. The company exceeded its expected crude capacity utilization and throughput, processing 3 million barrels per day, surpassing the 2.8 million barrels forecast. Marathon earned $1.87 per share, well above the analyst estimate of 98 cents.
For the current fiscal year, ending in December, analysts expect Marathon Petroleum to report an EPS decline of 59.4% year over year to $9.59. On the bright side, the company has a history of exceeding Wall Street’s EPS projections in its quarterly earnings reports.
Among the 18 analysts covering the MPC stock, the consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings and six “Holds.”
This configuration has been fairly stable over the past months.
On Nov. 11, Barclays PLC (BCS) reduced its price target for Marathon Petroleum from $168 to $159 while maintaining an “Overweight” rating on the stock.
MPC’s mean price target of $177.44 represents a premium of 11.7% from current price levels. The Street-high target of $221 indicates a potential upside of 39.2%.
