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Evercore ISI initiated coverage on Marathon Petroleum (NYSE:MPC) with an In Line rating and a $170.00 price target on Wednesday. According to InvestingPro data, the stock is currently trading near its 52-week high, with a market capitalization of $52.25 billion and strong financial health metrics.
The research firm cited Marathon’s position "at the intersection of downstream cash flow generation and midstream capital efficiency," noting its dual exposure to refining and MPLX (NYSE:MPLX)’s stable midstream platform has delivered sector-leading total shareholder returns since the Speedway divestiture. The company has maintained dividend payments for 15 consecutive years, with a current dividend yield of 2.14% and impressive 10.3% dividend growth in the last twelve months.
Evercore highlighted that Marathon’s streamlined asset base and approximately $2.5 billion in annual MPLX distributions cover dividends and capital expenditures, making the company’s refining cash flow "essentially a levered equity call on margins" that funds up to $3 billion in annual share buybacks. InvestingPro analysis reveals management has been aggressively buying back shares, with the company generating $4.46 billion in levered free cash flow over the last twelve months.
The firm acknowledged Marathon’s recent outperformance, up 700 basis points versus peers year-to-date, reflects optimism on California margin durability and midstream re-rating, but believes these positives are already reflected in the current valuation.
Evercore projects $9.5-13.6 earnings per share through 2027 with steady 7-10% free cash flow yields, describing Marathon as "a durable, high-return operator," while suggesting relative returns will likely converge with peers as valuation normalizes absent fresh catalysts.
In other recent news, Marathon Petroleum Corporation reported a net loss of $0.24 per share for the first quarter of 2025, missing analysts’ expectations of $0.18 EPS. Despite the earnings miss, the company’s revenue slightly exceeded forecasts, reaching $31.85 billion compared to the predicted $31.71 billion. Wolfe Research has raised its price target for Marathon Petroleum to $187 from $186, maintaining an Outperform rating, highlighting the company’s strong capital return framework and strategic investments. Marathon returned over $1.3 billion to shareholders through dividends and repurchases during the quarter, emphasizing its commitment to shareholder value. The company is investing heavily in refining and infrastructure improvements, which aligns with its strategy to enhance operational safety and reliability. Wolfe Research noted that Marathon Petroleum holds a competitive position with one of the industry’s lowest cost structures, excluding its MPLX subsidiary. The firm also pointed out that Marathon’s refining margin volatility is mitigated by its 64% ownership stake in MPLX. Analysts remain optimistic about Marathon’s refining environment, especially with announced refinery closures in key markets, enhancing the company’s longer-term outlook.
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