Evercore ISI analyst Stephen Richardson has begun coverage of Marathon Petroleum (MPC, Financial), assigning an In Line rating with a price target set at $170. Richardson highlights that Marathon is uniquely positioned at the nexus of downstream cash flow generation and efficient capital use in their midstream operations. According to the analyst, Marathon's stock has recently performed better than its peers, driven by optimism surrounding the company's resilient California margin and a positive re-rating in its midstream sector.
Though there is potential for growth from Marathon's momentum in the Mid-Continent and long-term opportunities in California, Evercore ISI believes these future benefits are already accounted for in the stock's current valuation. Investors appear to be optimistic about Marathon's strategic positioning and its capacity to leverage both downstream and midstream strengths effectively.
MPC Key Business Developments
Release Date: May 06, 2025
- Net Loss: $0.24 per share for the first quarter.
- Shareholder Returns: Over $1.3 billion returned through dividends and repurchases.
- Adjusted EBITDA: Approximately $2 billion, a sequential decrease of $145 million.
- Refining Utilization: 89%, processing 2.6 million barrels of crude per day.
- R&M Segment Adjusted EBITDA: $1.91 per barrel for the quarter.
- Midstream Segment Adjusted EBITDA: 8% year-over-year increase.
- Distributions from MPLX: $619 million, a 12.5% increase year-over-year.
- Renewable Diesel Utilization: 70% due to unplanned downtime.
- Operating Cash Flow: $1 billion for the quarter.
- Working Capital: $1.1 billion use of cash, primarily due to inventory builds.
- Capital Expenditures and Investments: $795 million for the quarter.
- Senior Notes Issuance: $2 billion issued by MPC.
- Consolidated Cash Position: $3.8 billion at the end of the quarter.
- Projected Throughput Volumes: 2.8 million barrels per day for the second quarter.
- Turnaround Expense: Approximately $265 million projected for the second quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Marathon Petroleum Corp (MPC, Financial) achieved a refining utilization rate of 89% despite completing significant planned turnaround activities, indicating strong operational management.
- The company reported a 104% capture rate, showcasing strong commercial performance even in a period of low refining margins.
- MPC's midstream segment adjusted EBITDA grew by 8% year over year, reflecting robust performance in this area.
- MPLX, a subsidiary of MPC, announced over $1 billion in strategic acquisitions, enhancing its midstream natural gas and NGL growth strategies.
- MPC is progressing with a $1.25 billion standalone capital plan for 2025, focusing on high-return projects that improve market volatility capitalization.
Negative Points
- MPC reported a first-quarter net loss of $0.24 per share, indicating financial challenges during the period.
- The renewable diesel segment faced a challenging environment, with facilities running at only 70% utilization due to unplanned downtime.
- The company experienced a $1.1 billion use of cash for the quarter, primarily driven by inventory builds, impacting cash flow.
- MPC's adjusted EBITDA for the quarter was approximately $2 billion lower sequentially, affected by decreased results in refining and marketing segments.
- Interest expenses saw a significant increase, partly due to net issuance of debt, impacting overall financial performance.
