Marathon Petroleum returned gains of 42.0% last year, with its stock price reaching a high of $181.83 and a low of $104.32. Over the same period, the stock outperformed the S&P 500 index by 11.4%. More recently, the company's 50-day average price was $163.82. 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 18,200 full time employees. Marathon Petroleum has not offered a dividend during the last year.
Exceptional EPS Growth and Healthy Leverage Levels:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $86,086 | $111,148 | $69,779 | $119,983 | $177,453 | $151,937 |
| Operating Margins | 5% | 4% | -18% | 4% | 12% | 11% |
| Net Margins | 3% | 2% | -14% | 8% | 8% | 8% |
| Net Income (M) | $2,780 | $2,637 | -$9,826 | $9,738 | $14,516 | $11,551 |
| Net Interest Expense (M) | $993 | $1,229 | $1,365 | $1,483 | $1,000 | $600 |
| Depreciation & Amort. (M) | $2,170 | $3,225 | $3,375 | $3,364 | $3,215 | $3,276 |
| Diluted Shares (M) | 526 | 664 | 649 | 638 | 516 | 396 |
| Earnings Per Share | $5.28 | $3.97 | -$15.13 | $15.24 | $28.12 | $26.31 |
| EPS Growth | n/a | -24.81% | -481.11% | 200.73% | 84.51% | -6.44% |
| Avg. Price | $60.74 | $49.87 | $33.42 | $54.65 | $82.11 | $179.245 |
| P/E Ratio | 11.33 | 12.47 | -2.21 | 3.56 | 2.9 | 6.78 |
| CAPEX (M) | $3,179 | $4,810 | $2,787 | $1,464 | $2,420 | $2,084 |
| EV / EBITDA | 7.98 | 7.93 | -5.96 | 7.29 | 2.61 | 4.9 |
| Total Debt (M) | $27,524 | $28,724 | $31,584 | $25,539 | $26,700 | $27,282 |
| Net Debt / EBITDA | 3.77 | 3.56 | -3.51 | 2.64 | 0.73 | 0.94 |
| Current Ratio | 1.36 | 1.8 | 1.81 | 1.7 | 1.76 | 1.67 |
Marathon Petroleum has exceptional EPS growth and rapidly growing revenues and decreasing reinvestment in the business. Additionally, the company's financial statements display a decent current ratio of 1.67 and healthy leverage levels. Furthermore, Marathon Petroleum has weak operating margins with a positive growth rate.
Marathon Petroleum's Valuation Is in Line With Its Sector Averages:
Marathon Petroleum has a trailing twelve month P/E ratio of 6.9, compared to an average of 8.53 for the Energy sector. Based on its EPS guidance of $14.75, the company has a forward P/E ratio of 11.1. According to the 15.8% compound average growth rate of Marathon Petroleum's historical and projected earnings per share, the company's PEG ratio is 0.44. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 12.0%. On this basis, the company's PEG ratio is 0.58. This suggests that its shares are undervalued. In contrast, Marathon Petroleum is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.73 is higher than the sector average of 1.78. The company's shares are currently trading 8.4% above their Graham number.
Marathon Petroleum Has an Analyst Consensus of Little Upside Potential:
The 15 analysts following Marathon Petroleum have set target prices ranging from $155.0 to $195.0 per share, for an average of $174.93 with a buy rating. The company is trading 3.7% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Marathon Petroleum has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 78.3% of the company's shares, and the insider ownership rate stands at 0.31%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $6,481,597,789.
