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Marathon Petroleum Kick-Starts Earnings Season with a Beat

PART:
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Part 5
Marathon Petroleum Kick-Starts Earnings Season with a Beat PART 5 OF 5

What to Expect from Marathon Petroleum Stock after 3Q17

Implied volatility in MPC

In the previous part, we looked at analysts’ ratings for Marathon Petroleum (MPC). In this final part, we’ll look at the changes in MPC’s implied volatility. We’ll also estimate the price range for MPC stock for the eight-day period ending November 3, 2017.

What to Expect from Marathon Petroleum Stock after 3Q17

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Marathon Petroleum reported earnings on October 26, 2017. That day, implied volatility in MPC fell 2.4% over the previous day to 20.8%. That’s lower than the 30-day average implied volatility of 22.1%. That same day, Marathon Petroleum stock rose 1.5%.

Expected price range for Marathon Petroleum stock for 8-day period

Considering MPC’s implied volatility of 20.8% and assuming a normal distribution of prices (bell curve model) and a standard deviation of one (with a probability of 68.2%), Marathon Petroleum stock could close between $59 and $55.50 per share in the eight-day period after its earnings release ending November 3, 2017.

Implied volatility for peers

Like MPC, implied volatilities in Andeavor (ANDV) and Delek US Holdings (DK) fell 0.20% and 0.10%, respectively, to 20.7% and 37.1%, respectively, on October 26, 2017. However, implied volatility in HollyFrontier (HFC) rose 1.1% over the previous day’s close to 32.8%. HFC stock fell 0.60% on October 26. ANDV and DK stock fell 0.10% and 0.80%, respectively, that day.

The SPDR Dow Jones Industrial Average ETF (DIA) saw a 0.30% rise in its implied volatility over the previous day to 9.9% on October 26. The SPDR S&P 500 ETF (SPY) saw a 1.1% rise in its implied volatility to 10.3% that day. Also on October 26, DIA rose 0.30%, and SPY rose 0.10%.

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