MPC - Marathon: Share Repurchases Continue To Generate Value (Downgrade)

2024-03-15 18:07:28 ET

Summary

• Marathon Petroleum shares have hit a 52-week high, up nearly 50% from a year ago.
• The company's Q4 earnings beat expectations, despite an 8% decline in revenue as utilization and operating costs have been strong.
• The widening of crack spreads and geopolitical risks provide upside potential for MPC's cash flow.
• My sum of the parts analysis, alongside share count reduction, argues for the upside to $216 by year-end.

Marathon Petroleum Corporation ( MPC ) has continued to be a strong performer with shares recently hitting a 52-week high, up nearly 50% from a year ago. Since reiterating MPC as a strong buy in November , shares have risen a further 27%, more than doubling the S&P 500's gains. With this rise, shares have reached my ~$186 price target, making now an appropriate time to revisit shares, as valuation may not be as compelling as it once was. I come to the conclusion that MPC is still a buy....

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