Marathon Petroleum

Financial Performance

5Y price score: 714

10Y return: 804.6%

DATE RANGE:

US$ Per
Share

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161.9

52-week range

367.6

354.88

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Required return / cost of capital

FCFF terminal growth rate

Your fair value & Margin of safety

To calculate fair value based on cost of capital and terminal growth assumptions above, please select free cash flow forecast.

Forecast:

Valuation

Free Cash Flow Yield

12.4 %

Dividend Yield TTM

1.1 %

Market cap $

$ 103,603

Price / Earnings TTM

12.2

Price / Book TTM

5.4

PEG TTM

Earnings growth and return

LTM

5YR

10YR

Total return (price & dividends)

108.3 %

530.9 %

804.6 %

Free cash flow per share growth

399.3 %

2,856.4 %

308.3 %

Earnings per share growth

346.5 %

187.6 %

152.5 %

Founded: 2,009

Employees: 18,300

Business Summary:Marathon Petroleum Corporation (MPC) functions as a prominent integrated energy enterprise, primarily concentrating its downstream operations across the United States. Its business is bifurcated into two main divisions: Refining & Marketing, and Midstream. The Refining & Marketing segment is responsible for processing crude oil and various other raw materials at its refineries, strategically located in the U.S. Gulf Coast, Mid-Continent, and West Coast regions. This division also acquires refined petroleum products and ethanol for subsequent distribution. Key outputs from this segment encompass a diverse array of transportation fuels, including different gasoline blends, heavy fuel oil, and asphalt. Additionally, it manufactures chemicals such as aromatics, propane, propylene, and sulfur. MPC sells these refined goods through multiple channels, including wholesale marketers domestically and globally, purchasers on the open spot market, and independent entrepreneurs who manage primarily Marathon-branded retail locations. It also supplies fuel via long-term agreements to direct dealer sites, predominantly under the ARCO brand. The Midstream segment handles the comprehensive movement, storage, distribution, and commercialization of crude oil and refined products. This is achieved through its extensive network of refining logistics assets, pipelines, terminals, towboats, and barges. Moreover, this segment engages in the collection, processing, and transportation of natural gas, alongside the gathering, transport, fractionation, storage, and marketing of natural gas liquids. By December 31, 2021, the corporation supported 7,159 branded jobber retail points, managed by independent entrepreneurs, spanning 37 U.S. states, the District of Columbia, and Mexico. Marathon Petroleum Corporation, established in 1887, maintains its corporate headquarters in Findlay, Ohio.

Fair Value Reference Estimate

Latest Earnings Call Takeaways

2026 Q1 (May 5, 2026)

1) Strategy & Leadership
- Marathon Petroleum Corporation (MPC) reported strong operational performance in Q1 2026, with refineries running at 89% utilization and achieving nearly 100% capture.
- The company proactively completed approximately 40% of its planned maintenance for the year in Q1, positioning itself well for strong demand in the remainder of 2026.
- Investments of nearly $330 million were made in the Refining and Marketing business, focusing on increasing jet fuel production capacity, particularly at the Garyville refinery.
- MPC announced a $5 billion share repurchase authorization, reinforcing its commitment to delivering industry-leading returns to shareholders.

2) Financial & Segment Results
- Adjusted earnings per share for Q1 2026 were $1.65, with adjusted EBITDA of $2.8 billion, reflecting an increase of nearly $800 million YoY.
- The Refining & Marketing segment generated adjusted EBITDA of approximately $1.4 billion, driven by strong refining margins and operational efficiency.
- Cash flow from operations, excluding working capital changes, was $1.7 billion, with a payout ratio of 62%.
- The Midstream segment saw a decrease in adjusted EBITDA by $122 million YoY, primarily due to derivative losses and divestitures of non-core assets.

3) Operational Plans & Investments
- MPC is enhancing its jet fuel production capabilities, with the Robinson Jet flexibility investment expected to add 10,000 barrels per day of incremental jet fuel production by Q3 2026.
- The company is expanding its international LPG trading footprint, securing long-term demand agreements, and investing in natural gas and NGL opportunities through MPLX.
- The Secretariat I processing plant in the Permian is expected to ramp up to 1.4 billion cubic feet per day over the next 9 to 12 months, contributing to cash flow durability.

4) Guidance & Outlook
- For Q2 2026, MPC anticipates refinery utilization to increase to 94%, supported by strong demand and operational readiness.
- The company remains optimistic about the refining macro environment, expecting demand to outpace supply in the long term, particularly in light of geopolitical tensions affecting global supply.
- MPC is focused on maintaining a disciplined approach to capital allocation while continuing to return capital to shareholders through share buybacks and dividends.

5) Problems / Headwinds
- The company faces challenges from geopolitical events that have tightened global markets and disrupted trade flows, particularly in the Middle East.
- There are concerns regarding the volatility of commodity prices and the impact of derivative losses on financial performance.
- The Midstream segment's performance was negatively affected by derivative losses and the absence of nonrecurring benefits from the previous year.

Bottom line: MPC's strong operational performance and strategic investments position it well for continued profitability and shareholder returns, despite facing geopolitical and market volatility challenges. The company's proactive measures and disciplined capital allocation reinforce its resilience in the refining sector.

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