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Piper Sandler has maintained a Neutral rating on Marathon Petroleum (NYSE: NYSE:MPC) with a consistent price target of $145.00.
The firm adjusted its estimates for Marathon Petroleum, taking into account recent commodity price trends and operational factors.
The revised third-quarter earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) are now expected to be $0.79 per share and $2,205 million, respectively. This marks a decrease from the previous forecasts of $1.73 per share for EPS and $2,731 million for EBITDA.
In other recent news, Marathon Petroleum has seen a series of significant developments. JPMorgan has lowered the price target for Marathon Petroleum shares from $172.00 to $171.00, attributing this to lower refining captures than previously modeled. The company's third-quarter earnings per share (EPS) estimate has been adjusted to $0.90, a decrease from the initial $2.00 prediction.
Marathon Petroleum is also experiencing a prolonged strike at its Detroit refinery, with negotiations between the company and the Teamsters union remaining unresolved. This strike, initiated by over 200 Teamsters, may potentially expand to other Marathon facilities.
In terms of cost reduction, Marathon Petroleum has maintained a neutral stance, according to Piper Sandler. The firm has noted Marathon's shift from focusing on cost reduction to becoming cost competitive. TD Cowen has recently upgraded Marathon's stock target to $190 from $187 following a significant earnings beat, driven by its refining operations and a robust share buyback program.
Marathon Petroleum has projected strong demand for gasoline, diesel, and jet fuel, with limited global refining capacity additions anticipated to support an enhanced mid-cycle environment for refining. The company's midstream segment, MPLX (NYSE:MPLX), is executing growth opportunities and increasing cash flows.
InvestingPro Insights
Recent InvestingPro data provides additional context to Piper Sandler's analysis of Marathon Petroleum (NYSE:MPC). The company's P/E ratio of 8.27 and adjusted P/E ratio of 7.72 for the last twelve months as of Q2 2024 suggest that the stock may be undervalued relative to its earnings, aligning with the firm's Neutral rating.
Marathon Petroleum's revenue for the last twelve months as of Q2 2024 stood at $148.77 billion, with a gross profit margin of 11.92%. While the gross profit margin is relatively low, it's worth noting that this is common in the oil and gas industry due to high operational costs.
InvestingPro Tips highlight that management has been aggressively buying back shares, which could be seen as a positive sign for investors. This aligns with Piper Sandler's observation about the company's substantial excess cash and potential for robust shareholder returns. Additionally, MPC has maintained dividend payments for 14 consecutive years, demonstrating a commitment to returning value to shareholders even in challenging market conditions.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Marathon Petroleum, providing a deeper understanding of the company's financial health and market position.
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