Long-established in the Oil & Gas industry, Marathon Petroleum Corp (MPC, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 1.71%, juxtaposed with a three-month change of 7.8%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Marathon Petroleum Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 7/10
- Growth rank: 6/10
- GF Value rank: 5/10
- Momentum rank: 0/10
Based on the above method, GuruFocus assigned Marathon Petroleum Corp a GF Score of 62 out of 100, which signals poor future outperformance potential.
Understanding Marathon Petroleum Corp's Business
Marathon Petroleum Corp, with a market cap of $60.98 billion and sales of $151.94 billion, operates as an independent refiner with a significant presence across the midcontinent, West Coast, and Gulf Coast of the United States. The company boasts a total throughput capacity of 2.9 million barrels per day. Notably, its Dickinson, North Dakota, facility produces 184 million gallons a year of renewable diesel, and its Martinez, California, facility is set to produce 730 million gallons a year of renewable diesel once converted. Beyond refining, Marathon Petroleum Corp also owns and operates midstream assets primarily through its listed master limited partnership, MPLX, showcasing a diversified operational structure.
Challenges Ahead for Marathon Petroleum Corp
Despite its robust operational framework and historical success, Marathon Petroleum Corp's financial strength, profitability, and growth metrics, as reflected in the GF Score, highlight the firm's potential for underperformance. The company's financial strength rank of 7/10, while respectable, does not guarantee immunity against market volatility or economic downturns. A profitability rank of 7/10 indicates sound financial health but does not necessarily predict future success. The growth rank of 6/10 suggests that the company's expansion may be slowing down, and a GF Value rank of 5/10 indicates that the stock may be fairly valued, with limited upside potential. Most concerning is the momentum rank of 0/10, which could signal a lack of investor confidence and a possible stagnation in stock price movement.
For value investors seeking to make informed financial decisions, these indicators are crucial. While Marathon Petroleum Corp has a commendable history and a solid presence in its industry, the GF Score serves as a reminder that past performance is not always indicative of future results. Investors should weigh these factors carefully and consider the broader industry trends, regulatory factors, and technological advancements that could shape the company's trajectory.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
