uploads/2019/01/MPLX.jpg

MPLX Stock Looks Attractive

By

Updated

MPLX

MPLX’s (MPLX) median target price is $41.4, which implies a potential upside of more than 25% from its current price of $33.0. Among the 16 analysts surveyed by Reuters covering MPLX, six recommended a “strong buy,” eight recommended a “buy,” and two recommended a “hold.” None of the analysts recommended a “sell” as of January 8. UBS cut MPLX’s target price from $42.0 to $41.0 last week.

MPLX

Article continues below advertisement

Valuation

MPLX stock has fallen more than 10% in the past year, which mirrored the weakness in the MLP space. Currently, MPLX is trading at a forward valuation of 10x, which lower than MLPs’ (AMLP) average of 11x. MPLX’s five-year historical average valuation is close to 20x. MPLX appears to be trading at a discounted valuation compared to its peers and its historical valuation.

MPLX is trading at a distribution yield of 7.8%, which is much higher than its five-year average yield of 3.7%. MPLX’s distributions grew at an above-average rate of 20% in the last five years. MPLX had impressive earnings growth over the years due to drop-down assets from Marathon Petroleum (MPC). The company reported strong volume growth in the third quarter. MPLX seems attractive based on its superior yield and expected earnings growth in 2019.

Advertisement

More From Market Realist