2024-07-10 17:00:09 ET
Summary
- Marathon Petroleum shares have dropped 25% from their 52-week high due to concerns over the health of the refining cycle.
- Despite recent pressure on shares from narrowing crack spreads, refining margins are still solid and may be near a bottom.
- MPC's strong free cash flow capacity, share repurchases, and potential hurricane-related catalysts point to significant upside potential, leading me to upgrade to a "strong buy.".
While shares of Marathon Petroleum ( MPC ) are up substantially over the past year, they have been a poor performer over the past few months, dropping about 25% from their 52-week high, as concerns have built over the health of the refining cycle. I last covered MPC in March , downgrading shares from a “strong buy” to a “buy.” While shares did briefly rally to my $216 target, in hindsight, I did not downgrade shares strongly enough as they have fallen by 15%. Given this underperformance and with concerns around refiners swirling, now is an opportune time to revisit MPC. I view this pullback as an opportunity....
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Marathon Petroleum: Recent Pullback Creates Opportunity Given Share Repurchases (Upgrade)