How Is Marathon Petroleum Stock Performing in 4Q17?


Nov. 20 2020, Updated 3:43 p.m. ET

Marathon Petroleum’s stock performance

Since October 2, 2017, Marathon Petroleum (MPC) stock has risen 15.7%, outperforming the SPDR S&P 500 ETF (SPY). SPY has risen 5.3% in the same period.

MPC’s peer Valero Energy (VLO) has risen 13.5% since October 2. Andeavor (ANDV) and Phillips 66 (PSX) have risen 5.0% and 7.8%, respectively, in the quarter so far.

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Marathon Petroleum stock rises in 4Q17

In 4Q17, Marathon Petroleum (MPC) stock has risen steeply. MPC’s 3Q17 earnings surpassed Wall Street analysts’ earnings estimate. During MPC’s pre-earnings (from October 2 to October 26) period, its stock rose 2.5%. However, during its post-earnings period since October 26, MPC stock has risen 12.9%, likely due to better-than-expected earnings.

For more on MPC’s 3Q17 performance, please refer to Marathon Petroleum Kick-Starts Earnings Season with a Beat. MPC is successfully restructuring the organization with activities culminating mostly by 1Q18. This could unlock potential value in the company for the shareholders, which is a favorable scenario.

MPC’s refining earnings indicator, the blended LLS 6-3-2-1 crack, has fallen quarter-over-quarter in 4Q17. This could result in lower refining earnings for MPC in 4Q17. The decline in refining indicators occurred because it is normalizing after experiencing high extraordinary growth in 3Q17, led by Hurricane Harvey. We will discuss MPC’s refining indicators later in this series.

The EIA (U.S. Energy Information Administration) has reported a rise in gasoline inventory levels for the week ended December 8, 2017, compared to the week ended September 29, 2017. However, distillate inventory levels have decreased during the same period.

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In short…

Marathon Petroleum (MPC) stock has risen in 4Q17 quarter-to-date due to better-than-expected earnings. This trend was partially offset by a fall in the refining earnings indicator and the rise in gasoline inventories in the industry.

Series overview

In this series, we will review Marathon Petroleum’s current position. In the next few parts, we will evaluate Marathon Petroleum’s moving average crossovers and price forecast range based on implied volatility.

We’ll also look at Wall Street analysts’ ratings and their estimates for the next dividend payment. We will then review which institutions are buying MPC and where the stock stands in terms of forward valuations compared to its peers.

We’ll also evaluate MPC’s financial position and operational performance, and we’ll review the company’s leverage and cash flow position. Later, we will look at MPC’s capex and segmental performance by analyzing its earnings model, refining yields, refining margin trend, and marketing segment performance. We will also discuss the potential direction of MPC’s refining earnings in 4Q17.

In the next part, we’ll review MPC’s moving averages.


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