CTRA - Marathon Petroleum raised to Buy at Mizuho on stronger refining outlook

2023-03-10 11:05:44 ET

Marathon Petroleum ( NYSE: MPC ) is upgraded to Buy from Neutral with a $160 price target, raised from $133, at Mizuho as part of the firm's improved outlook on refining ( CRAK ) given low product inventories and recovering demand.

In addition to strong Q4 results , Mizuho's Nitin Kumar said Marathon ( MPC ) management underscored its commitment to shareholder returns by announcing an incremental $5B share buyback authorization, bringing the total remaining authorization to ~$7.6B.

Kumar and his team anticipate further cash flow growth through the expansion of opportunities in renewable diesel and the competitiveness of the Martinez renewable diesel project in California; with pre-treatment capabilities expected to come online in H2 2023, the facility is expected to expand production capacity to 730M gal/year by the end of 2023.

Among other refiners, Kumar also raised his price target for Valero Energy ( VLO ) to $170 from $157.

The firm's top picks among oil and gas producers are Exxon Mobil ( XOM ), Diamondback Energy ( FANG ) and Coterra Energy ( CTRA ).

Marathon Petroleum ( MPC ) also was awarded a Buy rating at UBS, noting the company paid out $19.3B to shareholders during the past two years, the highest among independent refiners .

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