Marathon Petroleum price target raised to $187 from $186 at Wolfe Research

Wolfe Research raised its price target on Marathon Petroleum (NYSE: MPC) to $187.00 from $186.00 on Wednesday, while maintaining an Outperform rating on the stock. According to InvestingPro analysis, Marathon Petroleum appears slightly undervalued at current levels, with the stock showing strong momentum and a "GOOD" overall financial health score.

Marathon Petroleum has outperformed the Energy Select Sector SPDR Fund (XLE (NYSE:XLE)) by approximately 17% year-to-date, in line with larger refining peers Valero Energy (NYSE:VLO) and Phillips 66 (NYSE:PSX). With a market capitalization of $50.47 billion and trailing twelve-month revenue of $137.97 billion, the company maintains its position as a prominent player in the sector. Wolfe Research noted that the second quarter marks a seasonal inflection point for margins, though potential headwinds exist, including tight crude differentials.

The firm highlighted Marathon’s position with one of the industry’s lowest cost structures (excluding its MPLX (NYSE:MPLX) subsidiary) and pointed out that refining margin volatility is mitigated by Marathon’s 64% ownership stake in MPLX. Since the beginning of 2022, Marathon has repurchased approximately 45% of its outstanding shares, with a pace that would retire another 4% at current prices by the end of 2025. InvestingPro data reveals that management has been aggressively buying back shares, with 8 additional key insights available to subscribers.

Wolfe Research emphasized that Marathon’s capital return framework is strengthened by a dividend per share growth rate of 13% since 2019. The company currently offers a 2.24% dividend yield and has maintained dividend payments for 15 consecutive years, according to InvestingPro analysis. While this was initially funded by the sale of Marathon’s Speedway assets, the firm believes MPLX’s growth strategy will support continued dividend growth.

The research firm also noted Marathon remains optimistic about the refining environment as closures are announced in key markets, particularly on the West Coast, and has multiple options to recognize value by potentially high-grading its portfolio.

In other recent news, Marathon Petroleum Corporation (NYSE:MPC) reported a net loss of $0.24 per share for the first quarter of 2025, which was below analysts’ expectations of a $0.18 EPS. Despite this, the company’s revenue slightly surpassed forecasts, reaching $31.85 billion compared to the anticipated $31.71 billion. Additionally, Marathon Petroleum returned over $1.3 billion to shareholders through dividends and share repurchases. The company is investing heavily in refining and infrastructure improvements, indicating a focus on long-term growth. Marathon’s midstream segment, MPLX, announced over $1 billion in strategic acquisitions, enhancing its natural gas and NGL growth strategies. The company expects mid-single-digit EBITDA growth for its MPLX segment and continues to anticipate a 12.5% distribution increase in the coming years. Despite short-term earnings challenges, analysts maintain confidence in Marathon’s long-term growth potential. The firm remains committed to its $1.25 billion standalone capital plan for 2025, targeting high-return projects.

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