Marathon Petroleum Corp

MPLX crude pipelines are connected to supply hubs, and transport crude oil to Marathon Petroleum Corporation’s, or MPC’s, refineries and third parties.

Crack spreads usually fall when crude oil prices (USO) increase by more than product prices, or when product prices fall more than crude oil prices.

HollyFrontier (HFC) stock has risen 5.5% since January 2. The stock has risen less than its peers Marathon Petroleum (MPC) and Valero (VLO).

After HollyFrontier’s earnings, RBC lowered its target price on the stock from $68 to $66.

HollyFrontier’s refining segment is critical for its overall earnings. The refining segment’s adjusted EBITDA rose 127% to $1.7 billion in 2018.

Now, let’s look at the forward valuations of Marathon Petroleum (MPC), Tesoro (TSO), Valero Energy (VLO), and Phillips 66 (PSX).

Marathon Petroluem’s net debt-to-EBITDA ratio stood at 1.9x in 4Q16. It’s lower than the average industry ratio of 2.8x.

Marathon Petroleum (MPC) has been rated by 19 Wall Street analysts. Seventeen analysts (or 89%) have rated it as a “buy” so far in May 2017.

Average valuation multiples Earlier, we discussed refining stocks’ performance in 1Q17 and compared their dividend yields. In this part, we’ll look at Marathon Petroleum’s (MPC), Tesoro’s (TSO), Valero Energy’s (VLO), and Phillips 66’s (PSX) forward valuation. The average forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiples and average forward PE […]

Refining stocks’ valuation In this part, we’ll compare refining stocks’ EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) ratios with their three-year averages. Marathon Petroleum (MPC), Valero Energy (VLO), Phillips 66 (PSX), and Tesoro (TSO) are trading higher than their historical valuation. MPC was trading at a 10.3x EV-to-EBITDA ratio in 1Q17, compared […]

Marathon Petroleum Corporation, or MPC, owns 100% of the MPLX general partnership, or GP, interests, as well as the incentive distribution rights.

In this article, we’ll look at refining stocks’ EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) ratios compared to their three-year historical averages.

Marathon Petroleum stock has plunged 7% year-to-date. Due to its falling price in 1Q17, the stock has broken below its 50-day moving average.

PSX is trading at 9x its forward EV-to-EBITDA ratio and at 16.4x its forward PE ratio, which is above the peer averages.

A crack spread represents the price difference between refiners’ revenues—achieved through the sale of finished refined products—and refiner costs—that is, the price of crude oil.

According to MPC, a dollar-per-barrel change in the blended LLS 6-3-2-1 crack spread affects its annual net income by $450 million.

With respect to the price-to-earnings ratio, larger players Marathon Petroleum (MPC), Tesoro (TSO), and Phillips 66 (PSX) trade higher than the average valuations.

This series will provide you a complete overview of the refining industry as well as a quick snapshot of downstream sector stocks in the US.

Refining stocks’ performance was mixed in the fourth quarter. While Marathon Petroleum and HollyFrontier fell, Valero Energy and Phillips 66 rose.

Valero Energy (VLO) stock has risen 11.6% sequentially. The stock has risen due to stronger refining conditions in the current quarter.

The refining industry, including cracks and oil spreads, is going through a massive change in the current quarter. The change resulted in sharp changes in refining stocks’ prices. Notably, the industry seems to be ready for IMO 2020. While Valero Energy (VLO) and Phillips 66 (PSX) stocks have risen by 11.6% and 13.6% sequentially, Marathon […]

Marathon Petroleum’s (MPC) stock price has fallen 6.0% so far in Q4, likely influenced by the uncertainty regarding the company’s strategic path.

The crack spread is a major component that drives refiners’ valuation. In this article, we’ll look at the metric’s different aspects.

Oil refining and marketing stocks have been on investors’ radar. Valero Energy (VLO) and Phillips 66 (PSX) have risen 29.0% and 29.7%, respectively, YTD.

Institutional ownership of Marathon Petroleum (MPC) stock changed quite a bit in Q3, which was eventful for MPC due to Elliot Management’s recommendations.

In the third quarter, Elliott Management raised its stake in Marathon Petroleum by about 86%. Elliott has criticized MPC’s management on several occasions.

The total refiners capacity in the US is around 18.8 million barrels per calendar day. The refinery utilization rate in 2018 was 93%.

US crude oil production has more than doubled since 2009 and grew by 1.1% over the last year. Currently, there are 133 operable refineries in the US.

Valero (VLO) and Marathon Petroleum’s (MPC) stocks have fallen 2.9% and 0.7%, respectively, so far in Q3. Here, we review which refiner is a better buy.

MPC stock performed in line with the equity market and its peers on Thursday. The SPDR S&P 500 ETF (SPY), which represents the S&P 500 Index, fell 0.9%.

Analysts expect Delek’s EPS to fall by 38% YoY and 45% quarter-over-quarter to $0.84 in the second quarter of 2019.

Marathon Petroleum (MPC) continues to march on its growth trajectory with its organic capex activities.

Phillips 66’s dividend payments have risen in the past few years. In the first quarter, the company will pay a dividend of $0.8 per share on March 1.

HollyFrontier’s (HFC) forward PE ratio is 10.4x, below peers’ average of 11.2x. Marathon Petroleum’s (MPC), Andeavor’s (ANDV), and Phillips 66’s (PSX) forward PE ratios are higher than the average, at 12.8x, 13.8x, and 12.1x, respectively.

The implied volatility in Marathon Petroleum has fallen by eight percentage points since July 2 to the current level of 23%.

What is institutional ownership? In this part, we’ll look at changes in institutional ownership in Valero Energy (VLO). Institutional ownership is a measure of how many shares of a company are owned by institutions such as banks and mutual funds. Institutional ownership suggests these institutions’ confidence level in a stock. Usually, everything else being equal, higher […]

In 1H17, Phillips 66 saw its cash from operations fall 7% YoY to ~$1.3 billion. This was due to negative cash flow in 1Q17, led by seasonal inventory build-up.

Refining margins in 2Q17 In this part, we’ll compare leading US downstream companies’ GRMs (gross refining margins). Marathon Petroleum (MPC) had the widest GRM in 2Q17, followed by Andeavor (ANDV), Phillips 66 (PSX), and Valero Energy (VLO). The companies saw mixed GRM trends in 2Q17—let’s look at them more closely. Marathon Petroleum’s refining margin MPC’s gross […]

A Reuters survey estimated that US crude oil inventories would fall 3.5 MMbbls between August 11, 2017, and August 18, 2017.

The EIA (US Energy Information Administration) estimates that US gasoline demand rose 1.5% to 9.6 MMbpd (million barrels per day) in May 2017 compared to May 2016.

Phillips 66’s 90-day daily beta stands at 1.1, which is below its peer average of 1.5.

Valero’s crack indicators have fallen in all of these areas in May 2017 (as of May 23) as compared to April 2017.

Refiners’ cash flows have turned volatile over the past few quarters due to volatile refining earnings.

Marathon Petroleum’s correlation with WTI stands at 0.34. This value shows that the two have a positive but relatively weak correlation.

MPC’s valuations are above the peer averages likely because it’s now in the process of restructuring its organization to unlock value.

Tesoro (TSO) has been rated by 18 analysts. Of those, 12 have assigned the stock a “buy” or “strong buy” rating.

Tesoro (TSO) posted its 1Q17 results on May 8, 2017. Revenues missed analysts’ estimate, but adjusted EPS of $0.55 surpassed the estimate of $0.31.

After its earnings, Phillips 66 was rated by 19 analysts. Four analysts gave it a “buy,” 15 gave it a “hold,” and no analysts gave it a “sell.”

Of the 19 analysts covering MPC, 17 (89%) analysts have assigned “buy” or “strong buy” ratings, while two (11%) have assigned “hold” ratings.

MPC’s operating income rose 64% YoY to $553 million in 4Q16. The Refining segment’s operating income rose to $219 million in 4Q16 from $179 million in 4Q15.