Marathon Petroleum logged a -0.3% change during today's afternoon session, and is now trading at a price of $154.32 per share.
Marathon Petroleum returned gains of 71.0% last year, with its stock price reaching a high of $159.5 and a low of $89.4. Over the same period, the stock outperformed the S&P 500 index by 52.0%. More recently, the company's 50-day average price was $140.85. Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. Based in Findlay, OH, the large-cap Energy company has 17,800 full time employees. Marathon Petroleum has offered a 1.9% dividend yield over the last 12 months.
Exceptional EPS Growth at the Expense of a Highly Leveraged Balance Sheet:
| 2018-02-28 | 2019-02-28 | 2020-02-28 | 2021-02-26 | 2022-02-24 | 2023-02-23 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $74,104 | $86,086 | $111,148 | $69,897 | $120,451 | $178,236 |
| Gross Margins | 10.0% | 10.0% | 11.0% | 6.0% | 9.0% | 15.0% |
| Operating Margins | 5% | 5% | 4% | -4% | 3% | 11% |
| Net Margins | 5.0% | 3.0% | 2.0% | -14.0% | 8.0% | 8.0% |
| Net Income (MM) | $3,432 | $2,780 | $2,637 | -$9,826 | $9,738 | $14,516 |
| Net Interest Expense (MM) | -$674 | -$993 | -$1,229 | -$1,365 | -$1,483 | -$1,000 |
| Depreciation & Amort. (MM) | -$2,114 | -$2,170 | -$3,225 | -$3,375 | -$3,364 | -$3,215 |
| Earnings Per Share | $6.7 | $5.29 | $3.97 | -$15.14 | $15.99 | $22.37 |
| EPS Growth | n/a | -21.04% | -24.95% | -481.36% | 205.61% | 39.9% |
| Diluted Shares (MM) | 512 | 526 | 664 | 649 | 609 | 649 |
| Free Cash Flow (MM) | $9,344 | $9,337 | $14,204 | $5,056 | $5,671 | $18,691 |
| Capital Expenditures (MM) | -$2,732 | -$3,179 | -$4,763 | -$2,637 | -$1,311 | -$2,330 |
| Net Current Assets (MM) | -$13,818 | -$29,864 | -$24,991 | -$26,651 | -$21,296 | -$19,575 |
| Long Term Debt (MM) | $12,322 | $26,980 | $28,020 | $28,730 | $24,968 | $25,634 |
| Net Debt / EBITDA | 1.71 | 3.94 | 3.35 | 39.66 | 2.05 | 0.65 |
Marathon Petroleum has slimmer gross margins than its peers, weak operating margins with a positive growth rate, and a highly leveraged balance sheet. On the other hand, the company has exceptional EPS growth working in its favor. Furthermore, Marathon Petroleum has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and a decent current ratio.
Marathon Petroleum Is Reasonably Priced:
Marathon Petroleum has a trailing twelve month P/E ratio of 5.2, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of $15.3, the company has a forward P/E ratio of 9.2. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 26.4%. On this basis, Marathon Petroleum's PEG ratio is 0.2. Using instead the 10.6% weighted average of Marathon Petroleum's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 0.49, which implies that its shares may be underpriced. In contrast, Marathon Petroleum is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.43 is higher than the sector average of 1.68. The company's shares are currently trading -6.4% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for Marathon Petroleum:
The 14 analysts following Marathon Petroleum have set target prices ranging from $141.0 to $179.0 per share, for an average of $159.0 with a buy rating. As of April 2023, the company is trading -11.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Marathon Petroleum has an average amount of shares sold short because 3.3% of the company's shares are sold short. Institutions own 78.5% of the company's shares, and the insider ownership rate stands at 0.2%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $6,237,446,613.
