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 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.