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Marathon Petroleum (MPC) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Marathon Petroleum (MPC) closed the most recent trading day at $63.14, moving -0.44% from the previous trading session. This move lagged the S&P 500's daily loss of 0.14%. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq lost 0.1%.

Coming into today, shares of the refiner had gained 19.23% in the past month. In that same time, the Oils-Energy sector lost 1.67%, while the S&P 500 lost 0.91%.

Wall Street will be looking for positivity from MPC as it approaches its next earnings report date. This is expected to be October 31, 2019. On that day, MPC is projected to report earnings of $1.40 per share, which would represent a year-over-year decline of 17.65%. Our most recent consensus estimate is calling for quarterly revenue of $34.57 billion, up 49.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.78 per share and revenue of $124.65 billion. These totals would mark changes of -44.25% and +28.37%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MPC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 4.82% lower. MPC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, MPC currently has a Forward P/E ratio of 16.78. For comparison, its industry has an average Forward P/E of 17.49, which means MPC is trading at a discount to the group.

Also, we should mention that MPC has a PEG ratio of 1.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MPC's industry had an average PEG ratio of 2.44 as of yesterday's close.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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