Marathon Petroleum stock rating downgraded by Wolfe Research

Published 14/07/2025, 18:12
Marathon Petroleum stock rating downgraded by Wolfe Research

Investing.com - Wolfe Research downgraded Marathon Petroleum (NYSE:MPC) from Outperform to Peerperform on Monday. The oil refining giant, currently valued at $53.85 billion, has received mixed signals from analysts, with 7 recently revising earnings estimates downward according to InvestingPro data.

The downgrade follows Marathon Petroleum’s strong performance, with shares outperforming the S&P by 17% year-to-date, bringing the stock close to what Wolfe Research considers fair value.

The research firm’s action is part of a broader sector move, lowering U.S. Refining from Overweight to Market Weight, as the sector has experienced a margin recovery that largely met Wolfe Research’s expectations.

Marathon Petroleum has rebounded 50% from previous lows, with its 64% share of MPLX (NYSE:MPLX) currently representing approximately $82 per MPC share, or 46% of its current valuation.

Wolfe Research indicated that further upside would require confidence in another upward reset in mid-cycle margins, which the firm believes lacks the visibility that characterized the post-COVID "Regional Golden Age" of 2022-23.

In other recent news, Marathon Petroleum has been the focus of several analyst assessments and financial updates. The company is preparing to release its second-quarter 2025 earnings, with Mizuho (NYSE:MFG) maintaining a Neutral rating and a $184 price target, expecting slight beats on earnings metrics due to improved refining conditions. Evercore ISI initiated coverage of Marathon with an In Line rating and a $170 price target, highlighting the company’s strong cash flow generation and capital efficiency. Meanwhile, Wolfe Research raised its price target for Marathon to $187, maintaining an Outperform rating and noting the company’s competitive cost structure and strategic share repurchases.

Marathon’s first-quarter 2025 earnings report revealed a net loss of $0.24 per share, missing the forecasted $0.18 EPS, although revenues slightly exceeded expectations at $31.85 billion. The company continues to focus on returning capital to shareholders, distributing over $1.3 billion through dividends and buybacks. Marathon’s refining segment is expected to drive significant improvements in EBITDA in the upcoming quarter, despite challenges in the Midstream and Renewable Diesel segments.

Marathon’s strategic positioning in refining and midstream operations has been a focal point for analysts, with Evercore projecting steady earnings per share growth through 2027. The company remains optimistic about its refining environment, particularly on the West Coast, and continues to pursue portfolio optimization to enhance value. Despite mixed short-term earnings, analysts acknowledge Marathon’s strong execution and potential for long-term growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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