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Marathon Petroleum Corp MPC

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Morningstar’s Analysis

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Marathon Petroleum Earnings Continue Recovery; Large Buyback Keeps Shares Attractive

Allen Good, CFA Sector Strategist

Analyst Note

| Allen Good, CFA |

Marathon Petroleum showed further improvement in the third quarter with adjusted earnings of $464 million compared with a loss of $649 million last year thanks to improved refining segment earnings. At the same time, Marathon made additional progress on returning Speedway proceeds to investors, repurchasing $1.5 billion in shares during the quarter. It plans to repurchase the remining $7.5 billion of its plan by year-end 2022, which equates to 17% of the current market cap. It also plans to reduce structural debt by an additional $2.1 billion. Management also announced it was seeking strategic alternatives for the Kenai, Alaska, refinery, which could include a sale. Kenai is another refinery acquired through Andeavor that has higher costs and a poor strategic position--as such, divestment makes sense and should leave the core portfolio stronger.

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Company Profile

Business Description

Marathon Petroleum is an independent refiner with 13 refineries in the midcontinent, West Coast, and Gulf Coast of the United States with total throughput capacity of 2.9 million barrels per day. The firm also owns and operates midstream assets primarily through its listed MLP, MPLX.

Contact
539 South Main Street
Findlay, OH, 45840-3229
T +1 419 422-2121
Sector Energy
Industry Oil & Gas Refining & Marketing
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 57,900

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